A bridge loan covers the gap when you close on your next home before the sale of your current home closes. It lets you use the equity in the home you are selling (for the down payment on the new one, for example) before the sale money arrives. This page has a calculator for the cost of that loan, followed by what two big banks say about how their bridge loans work. It is part of the refinancing and home equity guide; for other ways to borrow against a home you already own, see the HELOC calculator and the home equity calculator.
Bridge Financing Calculator
How the calculator works
- Interest: simple interest charged by the day, so interest = loan amount × annual rate ÷ 365 × number of days. Your lender’s agreement sets the exact method, so check it against the quote.
- Total cost: interest plus any fees the lender quotes (the fee field starts at $0 because banks don’t publish a standard bridge fee).
- Cost as an annual rate: total cost ÷ loan amount × 365 ÷ days, which shows how a flat fee raises the cost of a short loan.
- Equity check: sale price minus the mortgage owing and your selling costs. TD notes that the amount of your bridge loan will be reduced by an estimated amount for closing costs, so the calculator warns when the bridge amount is larger than that equity.
The rate field starts at the chartered-bank prime rate, 4.45% as of 2026-09-30 (Bank of Canada). That is a reference point, not a bridge-loan rate: TD says bridge loans have interest rates similar to open rate mortgages, which are often higher than the interest rate you may be used to paying with your current mortgage, so replace it with the rate your lender quotes. The days field starts at 60, from TD’s own example below; the amount, sale price and mortgage fields start at the figures in TD’s example too.
Bridge financing cost examples
These examples use a hypothetical rate of 7% a year and leave out fees. Each line is loan amount × 0.07 ÷ 365 × days.
| Bridge loan | Days | Interest per day | Interest for the period |
|---|---|---|---|
| $150,000 | 30 | $28.77 | $863.01 |
| $200,000 | 60 | $38.36 | $2,301.37 |
| $300,000 | 90 | $57.53 | $5,178.08 |
A fee changes the picture most on a short loan. A $500 fee on the $150,000, 30-day loan above brings the total to $1,363.01 ; enter the fee you are quoted in the calculator to see its effect on the annualized cost.
How bridge financing works
TD describes bridge loans as loans that use your current home's equity to cover some of the costs of your new home, like the down payment. Once your current home’s sale closes, the sale proceeds repay the bridge loan and its interest.
TD’s own example of the timing: your new home closes in 30 days and your current home in 90 days, so the bridge loan covers the 60 days in between .
TD’s example of the amount: if your current home is worth $300,000 and you owe $200,000 on it, you may be eligible for a $100,000 bridge loan , and TD adds that the amount of your bridge loan will be reduced by an estimated amount for closing costs.
What the banks ask for and how long the loan lasts
Lenders set their own terms. Here is what TD Canada Trust and RBC Royal Bank say on their bridge financing pages:
| Lender | How long the loan can last | What you need |
|---|---|---|
| TD Canada Trust | typically a maximum of 90 days | sale and purchase agreements and approval for a TD Canada Trust Mortgage or TD Home Equity FlexLine on the new property |
| RBC Royal Bank | typically six months but can range from 90 days to 12 months or longer | a firm sale agreement must be in place on your existing home |
As stated on each bank’s page on October 1, 2026 (TD, RBC).
TD says its mortgage specialists can explain the options if you need a larger loan or a bridge loan beyond 90 days. RBC notes that bridge loans can vary widely in terms, costs and conditions, so the rate, fee and length on your own quote are what count.
Working out how much you need to bridge
The amount to bridge is the cash you need on the new home’s closing day that you don’t yet have:
Bridge amount = down payment on the new home + closing costs − cash you already have
| Item | Amount |
|---|---|
| New home price | $800,000 |
| Down payment (20% of the price, chosen for this example) | $160,000 |
| Closing costs (example figure) | $20,000 |
| Total needed on closing day | $180,000 |
| Cash you already have | $30,000 |
| Amount to bridge | $150,000 |
Closing costs depend on the province and the price: the land transfer tax calculator and the closing cost calculator work out your own figures, and the down payment calculator shows the minimum for the new home.
Alternatives to a bridge loan
| Option | How it works | Trade-off |
|---|---|---|
| Line up the closing dates | Negotiate the purchase and sale to close on the same day | No bridge cost, but depends on the buyer and seller agreeing |
| Make your offer conditional on selling | The purchase only goes ahead once your home sells | No bridge cost, but a seller may prefer an offer without the condition |
| HELOC on your current home | Borrow against the home you are selling, then repay from the sale | A revolving HELOC has its own limit (below); see the HELOC calculator |
| Unsecured line of credit | Borrow without using the home as security | Limits and rates differ; see HELOC vs personal line of credit |
The HELOC limit: The revolving (non-amortizing) HELOC part can't exceed 65% of the home's value at a federally regulated lender.
Risks of bridge financing
- The sale falls through. TD warns that if for some reason your sales agreement falls through on your current house, you may have to pay two mortgages until a new sale is finalized.
- The term runs out before the sale closes. RBC calls bridge loans a higher risk because you're taking on a new loan with typically a higher rate and no guarantee that your home will sell during the term.
- The closing is delayed. Each extra day adds a day of interest; change the days in the calculator to see the cost of a delay.
Bridge financing checklist
Before applying:
- Get the sale agreement for your current home and the purchase agreement for the new one.
- Get approved for the mortgage on the new home.
- Work out the amount to bridge (formula above) and the number of days between the closings.
- Ask each lender for its rate, any fees and the longest term it allows, and enter them in the calculator.
At closing:
- Confirm the bridge funds are advanced on the new home’s closing date.
- When your current home’s sale closes, confirm the bridge loan is repaid from the proceeds and discharged.
Related resources
Sources
The figures and rules on this page come from these sources, last checked against them between September 29, 2026 and October 2, 2026. How we check facts.
- Bank of Canada: Interest rates posted for selected products by the major chartered banks
- Bank of Canada: Data table
- CMHC: CMHC Refinance for Building Secondary Suites
- Financial Consumer Agency of Canada: Home equity lines of credit
- Justice Laws (Canada): Bank Act
- Justice Laws (Canada): Eligible Mortgage Loan Regulations
- OSFI: Residential mortgage underwriting practices and procedures
- RBC: Bridge Financing - RBC Royal Bank
- TD: Bridge Financing | TD Canada Trust