Bridge Financing Between a Sale and Purchase
Base the bridge loan on the expected net proceeds of the sale and on firm dates for both transactions.
Published 2026-07-21
Owning two houses for eight weeks — or none: the scenario stalks every household whose sale and purchase do not sign on the same day. Bridge financing exists for that corridor, with precise rules. The amount rests on the sale's expected net proceeds — confirmed price minus balance and costs — the future down payment the lender advances. The non-negotiable condition: two firm transactions, promises signed and conditions lifted on both sides, a bridge never being built on a conditional sale. The cost combines a higher rate, file fees and interest over the actual duration — a few thousand dollars for a few weeks, the price of a single move and of renovations done before moving in. The maximum duration, often 90 days, frames the delays. This article details the eligibility conditions, the full cost calculation and the notarial coordination that makes the bridge close itself on the appointed day.
Calculate the sale's expected net proceeds
Bridge financing advances the money your sale has not yet paid, and its amount is calculated on the expected net proceeds: the confirmed sale price, minus the mortgage balance to repay, minus the brokerage commission, legal fees and tax adjustments. That net, often ten to fifteen percent below the listed price, becomes the down payment available for the new purchase and therefore the bridge's ceiling. The calculation uses the accepted sale promise's real figures, not an optimistic estimate: a bridge sized on overstated proceeds leaves a hole to fill at closing, precisely when nothing can move any more. Take the low figure.
Require two firm transactions
The bridge's non-negotiable condition holds in one word: firm. Both transactions, the sale and the purchase, must have signed promises with conditions waived, because the lender repays the bridge from the sale's proceeds. A sale still conditional on the buyer's financing or an inspection guarantees nothing, and no serious lender will advance on that basis. That requirement structures the offer calendar: the purchase goes firm after the sale, or both coordinate with cross-conditions. The closing dates are then fixed with both notaries, the bridge repaying itself automatically the day the sale closes.
Price a few weeks realistically
A bridge costs more than an ordinary mortgage, and that surcharge is accepted knowingly. The typical structure: a rate two to three points above the mortgage rate, opening fees of a few hundred dollars, sometimes additional legal fees, and interest accrued over the overlap's actual duration. On a hundred and eighty thousand dollars for eight weeks, the total bill runs around two to three thousand dollars. That amount is compared with what it buys: a single move instead of two, no storage, the chance to paint and renovate before moving in, and above all no temporary housing between the two properties.
Plan for the sale being delayed
The scenario to cover is a sale that does not close on the expected date: a buyer struggling with financing, a delayed notary, a last-minute complication. The bridge contract sets a maximum duration, often ninety days, beyond which the file gets renegotiated on less favourable terms. The margin is therefore planned from the start: a bridge calibrated tightly to the expected dates absorbs no surprises, whereas a duration requested with a few weeks of cushion costs little more in interest and avoids an emergency renegotiation. Both transactions' documents are kept together until full repayment, and the bridge's closure confirmation is requested in writing.
Quebec scenario: compare before confirming
The dreaded scenario hits a family in L'Ancienne-Lorette: the perfect house accepts their offer on May 15, but their own sale only signs on July 10. Eight weeks owning two houses — or none. Bridge financing exists for that corridor, and the family examines it piece by piece before committing. The amount first: the lender advances the expected net proceeds of the sale — confirmed price minus mortgage balance and costs, about $180,000 — the down payment on the new purchase. The non-negotiable condition next: two firm transactions, promises signed and conditions lifted on both sides; a bridge is never built on a conditional sale. The cost finally: a rate two points above their mortgage rate, a $500 file fee, interest accrued over eight weeks — about $2,300 in all, the price of a single move and of renovations done before moving in. The advisor's question targets the blind spot: what if the sale is delayed? The bridge's maximum duration, 90 days, leaves a margin; beyond it, the file gets renegotiated. The family signs, the two notaries coordinate the dates, and the bridge repays itself on July 10, at the closing of the sale. The $2,300 has figured in their story ever since as the exact cost of never living out of boxes.
Checklist
- Confirm both transactions are firm
- Calculate the sale's expected net proceeds
- Verify the bridge's rate, fees and maximum duration
- Price the interest over the actual duration
- Plan the margin if the sale is delayed
- Coordinate the dates with both notaries
- Plan the automatic repayment at closing
- Compare with the cost of a double move
- Keep both transactions' documents together
Frequently asked questions
What is a bridge loan's amount based on?
The expected net proceeds of the sale: confirmed price, minus the mortgage balance and transaction costs. That sum — your future down payment — is what the lender advances for the new purchase. The calculation runs on signed figures, never on market hopes.
Why are two firm transactions required?
Because the bridge is repaid by the sale: a conditional promise would leave the loan without a certain source of repayment. Conditions lifted on both sides, dates fixed: that is the non-negotiable prerequisite. The two notaries then coordinate the dates so the bridge closes itself.
What does a bridge cost, and what if it stretches?
A rate one to three points above your mortgage rate, file fees, and interest over the actual duration — often a few thousand dollars for a few weeks. The maximum duration, generally 90 days, leaves a margin; beyond it, the file is renegotiated with the lender.