Short answer
A bridge loan can temporarily provide part of the net sale proceeds needed for the new purchase when your old home closes later. Most mainstream programs expect a firm sale agreement and a short, clearly defined gap. It is not an open-ended loan against an unsold home.
Why this becomes a closing problem
Your deposit and down payment are trapped in the old property for another week, but the new purchase closes Friday. Without the bridge arranged early, the lawyer may not receive enough funds to complete the purchase.
A practical example
Your purchase closes June 10 and your firm sale closes June 20. After subtracting the old mortgage, selling costs and adjustments, the lender may advance an approved portion of the expected equity for ten days. Interest and fees apply, and the sale proceeds repay the bridge through the lawyer.
How the lending routes may differ
- A lender: typically offers the lowest-cost bridge when it also funds the new first mortgage and the old property has a firm, acceptable sale.
- Alternative/B lender: may consider a more complex income or property file, with different fees, equity limits and documentation.
- MIC or private lender: may finance a longer or non-standard gap when there is enough equity, but pricing, legal costs and the repayment plan require close review.
Policy boundary: Porting, bridge periods, qualification, fees and property acceptance are lender and contract decisions. A regulator’s consumer information does not require every lender to approve the same structure.
Questions to ask before committing
- Is my sale firm, with all conditions removed?
- How much net equity remains after the old mortgage and selling costs?
- What is the maximum bridge period?
- Which lawyer instructions and sale documents are required?
Rajiv’s practical view
Tell your mortgage broker both closing dates as soon as the agreements are signed. A bridge request introduced at the last minute can delay funding even when the permanent mortgage was already approved.
Before making a firm offer or changing closing dates, confirm the full structure in writing. A pre-approval or verbal discussion is not the same as final approval of the borrower, property, sale, bridge amount and lawyer instructions.
Continue your research
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Moving dates or mortgage terms do not line up?
Share your sale date, purchase date, existing mortgage balance and the problem you are trying to avoid. Rajiv can compare the current lender’s port with A, alternative/B, MIC or private options where appropriate.
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Rajiv Verma, Mortgage Broker · Ontario