Closing Date Collision

You sold one home and bought another, and the closing dates do not line up. Take possession of the new place before the old sale closes and you need bridge financing. Have the sale close first and you are paying for temporary housing and storage instead.

This calculator prices the collision: bridge interest and setup fees, overlapping mortgage payments, and the out-of-pocket costs of the gap. One practical question: what does the mismatch cost, and is moving a closing date cheaper?

What it does not cover: the risk that your sale falls through while you are bridged, which is the real danger here. It does not price movers, and it does not handle a lender declining your bridge. Those are planning risks, not arithmetic.

Your inputs, explained

Gap in days. The number of days between taking possession of the new home and receiving the sale proceeds from the old one. Count calendar days, not business days. The common error is counting from the offer date instead of the closing date; only the funding dates matter.

Bridge amount. The shortfall the bridge loan covers, usually your down payment on the new home minus whatever cash you have on hand. Get it from your lawyer's statement of adjustments: it is the exact dollar figure you are short on the new closing day.

Bridge interest rate. Short-term bridge rates run well above mortgage rates. The site's calculator uses 9.50% as an illustrative default, with about a $500 setup fee and roughly 34 days as a typical term. These are illustrative defaults, not market quotes. Enter your lender's actual offer; this input swings the answer more than any other.

Overlapping mortgage payment. If you are carrying both mortgages during the gap, enter the old mortgage's monthly payment, prorated to the gap length. Your lawyer can confirm the per-diem interest figure.

Interim housing and storage. Hotel, short-term rental, or storage unit costs if the gap runs the other direction. The common error is forgetting these are real expenses but not closing costs; the lawyer does not collect them, so they never appear on your statement of adjustments.

How the math works

Bridge interest is simple daily interest: bridge amount × annual rate ÷ 365 × gap days. There is no compounding over a three-week bridge; it is straight per-diem cost. Add the lender's setup or administration fee, which is charged whether the bridge lasts four days or forty.

Then add the overlap costs: each day you own both homes, you are paying the old mortgage's daily interest plus property tax on two properties. If the gap runs the other way, add the daily cost of temporary housing and storage instead.

The calculator totals these into a single collision cost and compares it against the cost of moving a closing date, which is usually a per-diem penalty negotiated between the lawyers. That comparison is the whole point: a $1,500 date-move penalty beats a $3,000 bridge.

Worked example

A seller in Ottawa closes the purchase on 1 October and the sale on 22 October: a 21-day gap. The bridge amount is $400,000 and the lender offers a 9.50% bridge rate with a $500 setup fee.

Step 1: Daily bridge interest. $400,000 × 9.50% ÷ 365 = $400,000 × 0.095 ÷ 365 = $38,000 ÷ 365 = $104.11 per day.

Step 2: Total bridge interest. $104.11 × 21 days = $2,186.31.

Step 3: Setup fee. $500.00.

Step 4: Overlapping mortgage. The old mortgage payment is $2,100 per month. Prorated: $2,100 ÷ 30 × 21 = $1,470.00.

Step 5: Property tax overlap. Roughly $280 per month on the old home: $280 ÷ 30 × 21 = $196.00.

Step 6: Total collision cost. $2,186.31 + $500.00 + $1,470.00 + $196.00 = $4,352.31.

Her lawyer quotes a $75-per-day penalty to push the purchase closing back two weeks, which would cut the gap to 7 days. New bridge interest: $104.11 × 7 = $728.77, plus penalty $75 × 14 = $1,050. That trade is worth pricing before committing to the full bridge.

Provincial quirks and edge cases

In Quebec, transactions run through a notary rather than a lawyer, and disbursement timing can differ by a day or two around the signing. Confirm the exact funding date with your notary, because the bridge clock runs on funded days.

Ontario's 8% sales tax on the CMHC insurance premium is due in cash on the new purchase's closing day. If your bridge is already stretching your cash, that extra few hundred to few thousand dollars lands on the worst possible day.

In BC and Alberta, where there is no PST on the insurance premium, the cash crunch is slightly softer, but the bridge math itself is identical everywhere: the rate and the days are what matter.

If your sale is conditional and the condition has not been waived, most lenders will not advance bridge financing at all. A bridge is priced on a firm sale; an unwaived financing or inspection condition usually disqualifies you.

Questions to ask a professional

1. Ask your mortgage broker: will you advance a bridge on my file, at what rate and setup fee, and what is the maximum term?
2. Ask your lawyer: what is the per-diem penalty to extend my purchase closing, and how does it compare to the bridge cost?
3. Ask your lawyer: is my sale firm enough for bridge financing, or do outstanding conditions block it?
4. Ask your broker: if the bridge is declined, can a line of credit cover the gap, and what does that cost per day?