Key facts at a glance
- Bridge financing is a short-term loan – usually 3 to 24 months, interest-only – that covers the gap between a need for money now and a known event later: the sale of a property, a construction take-out, an estate settlement, a bank refinance, or a condo closing.
- Residential bridge (buy before you sell) through banks needs a firm sale; private bridge lenders fund without one, on equity, in as fast as 24 hours – $150,000 to $1,000,000+.
- Commercial and construction bridge: lease-up, repositioning, land to permits, completion of a stalled project, or paying out a maturing loan while CMHC or bank take-out financing is arranged; 55-70% loan-to-value, 12-24 months.
- Cost: monthly interest plus a lender fee and broker fee at funding, plus legal and appraisal. Use the calculator below; a 6-month bridge typically costs far less than a failed closing, a forced sale or a lost deposit.
- Common Ontario uses in 2026: pre-construction condo closings that appraised short, estate and probate bridges, mortgage non-renewals, power-of-sale payouts, and developers between construction completion and take-out.
- Gurpinder Gaheer, BA Hons, MBA – Mortgage Broker #M22004577, CreditReboot Mortgages, FSRA Brokerage #13163; Real Estate Broker, Right at Home Realty, Brokerage.
Quick answer: A bridge loan buys time. It is a short, interest-only mortgage secured by real estate that is repaid from a specific event – a sale, a take-out loan, a settlement – and it costs more per month than a bank mortgage because it is fast, flexible and temporary. In Ontario it is used by homeowners buying before they sell, by buyers whose pre-construction condo appraised below the purchase price, by executors waiting for probate, by owners paying out a lender that will not renew, and by developers and investors between phases. This page covers the types, the costs (with a calculator), how to qualify, and when a bridge is the wrong tool.
Types of bridge financing in Ontario
- Buy-before-you-sell (residential). Covers the down payment or the whole purchase until your current home closes. Banks offer it only with a firm, unconditional sale; private lenders fund on equity without a sale, which is what most 2026 files need.
- Condo closing gap. The pre-construction unit appraises below the 2021-2022 purchase price and the bank cuts the mortgage. A second mortgage or private first bridges the shortfall so you close instead of forfeiting the deposit and facing a lawsuit from the builder.
- Mortgage non-renewal / power-of-sale payout. Pays out a lender that refused to renew or has issued a Notice of Sale, giving 12 months to repair credit or income and refinance with a bank – see stop a power of sale and mortgage renewal denied.
- Estate and probate bridge. Funds the estate’s carrying costs, taxes, repairs and executor obligations until the property sells or probate is granted – see probate real estate.
- Commercial bridge. Acquisition with a short closing, lease-up or repositioning before a conventional lender will underwrite the income, or a maturing loan on a property that no longer meets the bank’s debt-coverage test – see commercial mortgage financing.
- Construction and land bridge. Land to permits, completion of a stalled project, or the gap between substantial completion and the CMHC or bank take-out – see construction financing.
- Business bridge. A loan secured by owned real estate that funds a contract, an acquisition or CRA arrears until receivables or a term loan arrive – see business capital.
What a bridge loan costs – calculator
Bridge and private mortgage pricing has three parts: monthly interest (interest-only, often capitalised so there are no payments during the term), a lender fee and broker fee deducted at funding, and legal and appraisal costs. Enter your numbers:
Bridge loan cost calculator (Ontario)
Estimate the real cost of a short-term bridge or private mortgage. Enter the numbers your lender quoted; the result shows interest, fees and the all-in cost for the term.
Interest-only, simple interest, paid monthly or capitalised; the net advance is the amount after fees and legal costs are deducted. This is an estimate for planning. Your written commitment shows the exact cost of borrowing. Gurpinder Gaheer, BA Hons, MBA – Mortgage Broker #M22004577, CreditReboot Mortgages, FSRA #13163.
Two things the calculator shows that most borrowers miss: the all-in annualised cost is higher than the quoted rate because of the fees, and the shorter the term the higher that annualised figure looks – which is fine, because the point of a bridge is that it ends. Compare the all-in dollar cost to what it prevents: a lost deposit, a forced sale under power of sale, three months of lender legal fees, or a missed acquisition.
How to qualify
- Equity. Residential bridges to about 75-80% of the property’s value including all mortgages; commercial and land bridges to 55-70%. The appraisal, not the purchase price, sets the number.
- A defined exit. A listed or saleable property, a committed take-out lender, a probate timeline, a maturing receivable. The exit is underwritten harder than the borrower.
- Ability to carry, or capitalised interest. If payments cannot be made during the term, interest is prepaid or added to the loan from the advance.
- Clean title and insurance. Existing mortgages are paid out or postponed; property taxes current or paid from the advance.
- Credit and income matter less than at a bank; they shape the price, not the decision.
When a bridge is the wrong tool
- There is no real exit – the sale is wishful, the take-out lender has not been approached, the income will not recover. A bridge then becomes a slow power of sale.
- The property has little equity after the bridge; a sale or a negotiated settlement is better.
- The problem is unsecured business debt without going-concern value; an insolvency proposal may be the honest answer.
- A bank bridge is actually available (firm sale in hand) – take the cheaper money.
Timeline
- Day 0: call or WhatsApp with the property, the amount, the purpose and the exit; application online at apply.gaheer.com.
- Day 1-3: approval in principle from a private, MIC or alternative lender; appraisal ordered.
- Day 3-10: commitment signed, lawyer instructed, title and payouts arranged.
- Day 5-15: funding. Urgent residential bridges can close in under a week; commercial and land in 2-4 weeks.
Need to bridge a closing, a renewal, an estate or a project?
Frequently asked questions
What is bridge financing?
A short-term, interest-only loan secured by real estate that covers the gap between a need for funds now and a defined repayment event later – typically the sale of a property, a take-out mortgage, probate, or a refinance. Terms run from a few weeks to 24 months.
How much does a bridge loan cost in Ontario?
Monthly interest at a rate above bank mortgages, plus a lender fee and broker fee at funding, plus legal and appraisal costs. Use the calculator on this page with the numbers you were quoted; the exact cost of borrowing is set out in the written commitment before you sign.
Can I get a bridge loan without selling my house first?
Yes. Banks require a firm sale; private and alternative lenders fund on equity without one, which lets you buy first, move once, and sell at your own pace.
How fast can bridge financing close?
Residential bridges on clean title can fund in under a week; approvals in as fast as 24 hours. Commercial, construction and land bridges take 2-4 weeks because of appraisals, environmental reports and title work.
Is a bridge loan the same as a private mortgage?
A bridge loan is a purpose; a private mortgage is a source. Most bridges in Ontario are funded by private lenders or MICs as first or second mortgages. Banks also offer bridge loans, but only against a firm sale and only for the gap between two closings.
What happens if my exit is delayed?
Most bridge lenders will extend for a fee if the plan is still credible – a listed property, a take-out in underwriting. The risk of an open-ended bridge is why the exit is checked carefully before funding, and why I would rather tell you a bridge does not fit than arrange one that becomes a power of sale.