Many buyers lose out on homes because their sale and purchase closings don’t align. In competitive markets, waiting can cost you opportunities, time, and flexibility. Bridge financing (also known as a bridge loan) offers a short-term solution—but it comes with associated costs and risks. Without clarity, you might overextend or face double payments.
At Sunlite Mortgage, we help you determine whether a bridge loan is the right fit for your situation. We’ll run side-by-side comparisons, forecast carry costs, and help you move confidently — not reactively.
A bridge loan (also known as bridge financing, bridging mortgage, or interim financing) is a short-term loan that helps homebuyers cover the down payment, closing costs, or equity shortfall when their new home’s closing occurs before the sale of their existing home.
Once your current home sells, the proceeds repay the bridge loan (interest + principal + fees) before applying any leftover to your new mortgage.
Most bridge loans in Canada range from 30 to 120 days, although some lenders may extend the terms up to 6 or 12 months, depending on the circumstances. Because they are short, interest may be charged up front or added to the closing.
Major Canadian banks) and many credit unions offer bridge financing — usually only to borrowers already doing their mortgage with them. Additionally, mortgage brokers and alternative/private lenders can offer bridge financing when traditional institutions are unwilling to do so.
To qualify, you typically need:
If your closing schedules are flexible or uncertain, more traditional bridging may be rejected.
The bridge amount is generally the equity in your current home minus closing, commission, legal and other fees. Some lenders cap the amount to a percentage (e.g. 60-80%) of net proceeds.
For example, suppose your home is worth $500,000 and you owe $300,000. After considering estimated costs, you may qualify to borrow $150,000 (less a buffer). That bridge amount goes toward the new home’s down payment/closing, then is repaid once the old house sells.
Some lenders use a prime rate plus 2–3% as a baseline rate for bridge loans.
Because of these trade-offs, bridging should be used strategically — not by default.
You may consider a bridge loan when:
But avoid bridging if:
Your Sunlite Mortgage agent will model your scenario so you can see when bridging adds value — and when it becomes a hidden burden.
Throughout, Sunlite Mortgage will liaise with the lender and your lawyer to manage the timing, structure, and communication to ensure a smooth transition.
A bridge loan (bridge financing) is short-term funding used to cover the gap between buying a new home and selling your current one.
Standard terms range from 30 to 120 days, although some lenders may extend this period to 6 or 12 months in exceptional cases.
Typically priced at prime + 2–5%, often higher than standard mortgage rates due to the short-term and risk profile.
It depends on your home equity, mortgages outstanding, closing costs, and lender policies.
In many cases, interest accrues and is paid at closing; in some instances, interest payments may be required on a monthly basis.
You may need to carry dual payments longer or renegotiate the bridge term or fallback options.
Yes — appraisal, legal, lien registration, administrative bridging setup, extension costs, etc.
Some lenders may allow, but terms are stricter, and you’ll need to meet extra income, credit, and equity requirements.
It depends — HELOCs often have lower rates and more flexibility but require you to make payments while bridging defers payment.
Yes — once your old property sells, you may refinance or consolidate. We’ll show you optimal paths.
Don’t let your credit score stop you from solving your financial challenges. At Sunlite Mortgage, we’re focused on solutions, speed, and support — not shame.
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