The Short Answer
Bridge financing is short term borrowing that covers the gap when your new home closes before your existing home does. Canadian banks price it at roughly prime plus 2 to 3 percent, which is about 6.45 to 7.45 percent in September 2026, plus an administration fee of $200 to $500. Terms run up to 90 days at some lenders and 120 days at others. The gating requirement is the one most buyers miss: major banks require a firm, unconditional sale on your existing home before they will bridge you. Without a firm sale you are looking at a private lender at a materially higher cost.
Want this applied to your own property? Call the Kaizen Real Estate Team at (647) 370-8885.
The Problem Bridge Financing Solves
You have sold your home in Markham Village and bought a larger one in Angus Glen. Your purchase closes November 14. Your sale closes November 28. For fourteen days you own both properties and you need the down payment on the new house, which is currently locked up in the old one.
That is the entire problem. Bridge financing advances the equity from the sale a few days or weeks early so you can close the purchase on time.
Michael John Lau, a REALTORĀ® who helps move up buyers purchase detached homes in Markham, Ontario, tries to solve this at the negotiating table before it becomes a financing problem. Aligning closing dates is free. Bridging costs money. But dates cannot always be aligned, and bridging is a normal, well understood tool when they cannot.
Questions About Your Situation?
Every Markham property and every timeline is different. Call the Kaizen Real Estate Team at (647) 370-8885 and speak to a REALTORĀ® who works this market daily.
The Requirement That Decides Everything
Before anything else, understand this: a firm sale on your existing home is essential for bank bridge financing.
Firm means unconditional. All conditions satisfied or waived. If your sale is still conditional on the buyer's financing or home inspection, the bank has no certainty the money will arrive, and most will not lend against it.
If you do not have a firm sale, your options narrow to a private lender or a B lender, who may proceed without one but will price accordingly. That is the difference between roughly 7 percent and rates well into double digits.
The practical consequence for a Markham move up buyer is a sequencing decision. Selling first gives you certainty and access to bank bridging. Buying first gives you the home you want but can leave you without the financing tool that makes the timing work.
What It Costs in 2026
Item | Typical figure |
|---|---|
Interest rate | Prime plus 2 to 3 percent, so roughly 6.45 to 7.45 percent at a 4.45 percent prime |
Administration or setup fee | $200 to $500 |
Maximum term | 90 days at some lenders, up to 120 days at others |
Legal fees | Roughly $200 to $300 per lawyer, with all in costs commonly $1,000 to $2,000 |
Lien registration | Typically required above about $200,000 or beyond 120 days |
The rate looks high next to a 4.09 percent five year fixed mortgage, and there is a reason. Bridge loans are priced like open mortgages because you can repay them at any moment without penalty. You are paying for flexibility over a very short period.
What that actually adds up to
Consider a $400,000 bridge over 21 days at 7 percent. The interest is roughly $1,610. Add a $400 administration fee and $300 in legal costs and the total is around $2,300. On a move up purchase in the $1.5 million range, that is a rounding error against the cost of missing the home or forcing a rushed sale.
Sellers often anchor on the interest rate and lose sight of the dollar amount. Run the dollars.
How the Amount Is Calculated
Lenders work from the net proceeds of your firm sale:
Sale price, less mortgage payout, less real estate commissions, less legal fees, less any prepayment penalty, equals the maximum bridge available.
A worked example on a Markham home:
- Firm sale price: $1,250,000
- Less mortgage payout: $620,000
- Less commissions and HST: approximately $70,000
- Less legal fees and adjustments: approximately $3,000
- Net proceeds available to bridge: approximately $557,000
If your down payment on the new home is $500,000 and you have already paid a $50,000 deposit, you need $450,000 bridged. That sits comfortably inside the available amount.
Neeraj Moolchandani on Solving It at the Table Instead
Neeraj Moolchandani, REALTORĀ® at Kaizen Real Estate, treats a bridge loan as the fallback rather than the plan. Aligning two closing dates during negotiation costs nothing. Bridging costs interest, an administration fee and legal work. The cheapest bridge is the one you never needed.
Where a bridge is unavoidable, the point Neeraj presses is the dollar amount rather than the rate. Buyers see seven percent next to a four percent mortgage and hesitate. On a three week bridge the actual cost is often a couple of thousand dollars, against the cost of losing the home or forcing a rushed sale.
Who Offers It
All of the Big Five, TD, CIBC, Scotiabank, RBC and BMO, offer bridge financing, but generally only to their own mortgage customers. That is a planning point: if you are arranging a new mortgage anyway, ask about bridging at the same time rather than after your dates are set.
Credit unions also offer it. Private and hard money lenders offer it with more flexibility, including without a firm sale, at significantly higher cost. Approval timing runs about a month at conventional lenders and roughly two to three weeks with private lenders.
When a Lien Gets Registered
Small, short bridges are frequently unsecured against the existing property, which keeps costs down. A lien is typically registered when the loan exceeds roughly $200,000 or extends beyond 120 days, which brings a real estate lawyer into the process and adds cost.
Where your lender already holds a collateral charge on the property, you may avoid additional legal fees entirely. Worth asking.
Line Up the Dates Before You Need the Loan
Most bridge financing is avoidable with better date negotiation. The Kaizen Real Estate Team plans the sequence before an offer becomes firm.
The Alternatives
A home equity line of credit
Cheaper than a bridge, at roughly prime plus 0.50 percent, or about 4.95 percent in September 2026. The catch is timing: it must be arranged before your home sells, because a lender will not open a new line against a property under a firm agreement of purchase and sale. If a move is on your horizon, setting up a HELOC early is the single cheapest form of preparation.
Renegotiating the closing dates
Free, and worth attempting first. If the two closings can be moved to the same day or within a day or two, the problem disappears. This is a negotiation your REALTORĀ® should be running on your behalf before an offer becomes firm.
A gifted down payment
Common among Markham families and often the simplest solution where it is available. Lenders will require a signed gift letter.
A private lender
The route when there is no firm sale. Faster and more flexible, materially more expensive. Reasonable as a short term tool, poor as a plan.
What If the Sale Collapses While You Are Bridged
This is the risk worth naming plainly. If your buyer fails to close while you are carrying a bridge, you are left with two properties, two mortgages and a bridge loan the lender can call.
Lender remedies vary and are set out in your specific loan agreement rather than by any general rule. Ask your lender directly what happens in that scenario before you sign, and make sure your real estate lawyer has reviewed the agreement. A buyer who defaults on a firm purchase in Ontario is exposed to substantial damages, but that is a lawsuit, not a solution to a closing you have to fund next week.
The practical protections are ordinary ones: a meaningful deposit from your buyer, care about the strength of the buyer's financing, and closing dates that leave a small margin.