🏗 What is a Bridge Loan & Do You Need One?

Edith Parinas
Oct 8
2 min read

Let’s say you’re selling your current home and buying your next one — but the timing doesn’t quite line up. You’ve found your dream home, but your buyer’s cheque hasn’t hit your bank account yet.

Enter the bridge loan: a short-term financing option that helps you “bridge” the gap between the sale of your existing home and the purchase of your new one. It gives you access to the equity in your current home before it officially closes — allowing you to move forward confidently.

🔑 When Do You Need a Bridge Loan?

Bridge loans can be a lifesaver in real estate scenarios that don’t align perfectly. Some common reasons you might consider one:

You're buying before your current home closes
You need your down payment before your sale funds arrive
You want to make an offer without a sale condition
You’re juggling moving logistics between homes
You’re trying to avoid temporary housing or storage

📊 How Bridge Financing Works in Canada

Most lenders will offer bridge financing if:

✅ You have a firm sale agreement on your existing home

✅ You qualify for the mortgage on the new home

✅ The gap between your home sale and home purchase is typically less than 90 days

Lenders will charge interest on the borrowed amount, often at prime + 2–4%, and may also add a small administration fee.

🟰 Pros and Cons of Bridge Loans

Pros:

Allows you to buy your next home without waiting
Prevents you from losing out on your dream home
Eases the pressure of perfectly aligned closing dates
Gives time to move more comfortably

Cons:

Added short-term borrowing costs
Requires a firm sale — not just a listing
Must qualify for the new mortgage plus the bridge

🧠 Things to Ask Your Mortgage Broker (Hi, that’s me!)

Before jumping into a bridge loan, ask:

Can I afford both properties temporarily?
Is there a firm sale in place?
What is the total cost of the bridge loan?
Is the timeline tight enough to justify it?
Will the new lender allow bridge financing?

Not all lenders allow bridge financing — but don’t worry, I work with a wide range of lenders and will make sure your deal is covered.

🧘‍♀️ Real Talk from Edith

I’ve helped many clients through this exact scenario, and one thing’s always true: real estate timing is rarely perfect — but we can plan for the messy middle. My job is to make sure your move is as smooth as possible, and bridge financing is just one of the tools we can use.

Let’s talk through your plan and see what makes sense for your timeline, finances, and stress levels.