Bridge Financing

Your purchase closes Tuesday; your sale closes three weeks later. For those 21 days you own two homes, owe two mortgages, and the new home's down payment is still locked inside the old one. Bridge financing lends you that trapped equity for the gap between closings. It is short-term, expensive, and far cheaper than breaching your purchase agreement because the money was not there on the day.

What this calculator answers

It estimates the total cost of bridge financing: the interest on the bridged amount for the days between your closings, plus the lender's setup fee. It answers the practical question — for my gap, in days, at my rate, what does the bridge cost?

What it deliberately does not cover

This calculator prices the bridge; it does not grant it. Approval generally requires both transactions to be firm and unconditional — a conditional sale cannot be bridged. It does not include legal fees on each transaction ($1,200 to $2,500 per side), the land transfer tax due in cash on the purchase, or the mortgage payments you keep making on both properties during the overlap. And it does not model the disaster scenario: if your sale collapses after the bridge is advanced, the bridge becomes due and you own two homes with no exit. Price the bridge here; stress-test the "what if" with your lawyer.

Every input, explained

Bridge amount. Enter the shortfall — the cash you need on purchase closing day that is trapped in the unsold property, usually a portion of your equity rather than the full price. The common error is bridging far more than needed "to be safe," which just multiplies the interest for no reason.

Days between closings. Enter the calendar days from the purchase closing date to the sale closing date. The common error is counting only business days, or entering the gap you hope for rather than the contracted dates — use the agreement dates, then mentally add a buffer in case the sale slips.

Interest rate. The calculator's illustrative default is 8.20% (prime + 3%) — the site calculator's example starting value, not a market quote. The common error is treating the default as typical; enter the rate your lender actually quoted.

Setup or lender fee. The illustrative default is $400 — again the site calculator's example value, not a market fact. The common error is forgetting the fee on short bridges, where it can exceed the interest itself.

How the math works

Bridge interest is simple interest on the bridged amount for the exact number of days: amount × rate × days ÷ 365, plus the flat setup fee. There is no compounding to worry about over a few weeks — the cost scales linearly with the amount and the days, which means every day you shave off the gap saves the same daily amount.

Worked example: $180,000 bridged for 25 days (illustrative rate and fee)

A buyer in Hamilton sells for $750,000 and buys in Burlington for $900,000. The purchase closes 25 days before the sale, and $180,000 of the buyer's equity is needed on purchase day. The rate and fee below are the site calculator's illustrative defaults — not quotes.

1. Annual interest on the bridge amount: $180,000 × 8.20% = $14,760 per year.
2. Daily interest: $14,760 ÷ 365 = $40.44 per day.
3. Interest for 25 days: $40.44 × 25 = $1,010.96.
4. Setup fee (illustrative default): $400.
5. Total bridge cost: $1,010.96 + $400 = $1,410.96, roughly $1,411.

Two observations. On a short bridge the $400 fee is nearly a third of the total cost — fee shopping matters as much as rate shopping. And each extra day costs $40.44: if the sale slips a week, add about $283. That is the number to keep in mind when your lawyer calls about a delayed closing.

What a delayed closing actually costs

"Add about $283 if the sale slips a week" is not a rounded guess — it is the same rate applied to seven more days, exact arithmetic on numbers you already entered, not a new assumption about how long the delay might run. The calculator prices it directly as its own line: $180,000 × 8.20% × 7 ÷ 365 = $283.07, on top of whatever the planned gap already costs. Because bridge interest is simple and linear, this figure scales cleanly — a two-week slip on the same bridge costs twice that, about $566. It is a small number next to the $14,760 annualized rate on the full bridge amount, which is exactly the point: a short bridge that runs a little long rarely breaks the budget on its own, but a status-certificate delay or a buyer's financing falling through can stack several of these weeks in a row, and that adds up fast enough to renegotiate a closing date over.

Provincial quirks and edge cases

Bridge mechanics are the same in every province, but the cash around them is not. In Quebec both transactions run through a notary, and the timing of notarial disbursements can shift the effective gap by a day or two — confirm the disbursement schedule, not just the deed dates. Everywhere, the purchase side still demands land transfer tax in cash on closing day (for scale: $8,475 on a $600,000 purchase outside Toronto, $16,950 inside it) plus $1,200 to $2,500 in legal fees per transaction — the bridge covers the equity gap, not these costs. The sharpest edge case is a delayed or collapsed sale: bridge loans are typically demand facilities tied to the sale proceeds, so if the sale falls through you need an immediate plan B. And if the property being sold is a condo, a slow status certificate can push the sale closing — build that risk into the day count rather than discovering it mid-bridge.

Questions to ask a professional

1. Lender: Do I qualify for bridge financing — are both transactions firm and unconditional, and what documentation do you need?
2. Lender: Is the rate fixed for the bridge term, is interest charged per calendar day, and is the setup fee flat or per advance — what is my all-in cost for my exact day count?
3. Real estate lawyer: What are the exact closing dates on both transactions, and what are my obligations on the purchase if the sale closing is delayed by a week or more?
4. Mortgage broker: For my timeline, would a HELOC on the current home be cheaper than a bridge loan — and can it be arranged in time?