BRIDGELOAN-CA-20260927A bank bridge loan in Canada is cheap for what it does, but only after your current home is sold firm. At the Big Six prime rate of 4.45% in September 2026, a $200,000 bridge for 30 days at prime plus two points costs about $1,060 in interest, usually taken out of your sale proceeds by your lawyer on closing day. The price jumps when there is no unconditional sale agreement: banks will not bridge an open sale, and a private lender's minimum interest and fees can turn the same month into a bill of $9,000 or more.
So the first question is not which bank has the best bridge rate. It is whether the sale of your old home is firm, how many days separate the two closing dates, and whether the new mortgage sits with the lender that will bridge you. Everything below follows from those three facts.
How a bridge loan works in a Canadian home move
You buy the new home first. On its closing day you need your down payment, but your equity is still locked in the old home, which closes days or weeks later. The bridge lends you that equity for the gap. On the sale closing day your real estate lawyer, or your notary in Quebec, pays off the old mortgage, repays the bridge with its interest from the proceeds and sends you what remains. Before the bridge is advanced you sign an irrevocable direction that lets the lawyer do exactly that.
Interest is simple and daily: the amount bridged times the annual rate, divided by 365, times the number of days. There is no amortization, and at the big banks there are normally no monthly payments during the bridge. Private and B-lender bridges are the exception and may bill interest monthly.
What the banks themselves say
| Lender | Term | Firm sale needed | Other conditions | Rate on the official page |
|---|---|---|---|---|
| TD Canada Trust | Typically up to 90 days; longer or larger bridges by discussion with a mortgage specialist | Yes, copies of both the sale and the purchase agreements | You must be approved for a TD mortgage or TD Home Equity FlexLine on the new property | Not published; TD says bridge rates are similar to open-rate mortgages |
| RBC Royal Bank | Typically six months, ranging from 90 days to 12 months or longer | Yes, a firm sale agreement on the existing home | Bridge draws on the equity in the current home for the next down payment | Not published |
| CIBC | Not stated | Usually yes, a signed unconditional sale offer | Funds come from the value of your existing home | Not published |
Two practical conclusions follow. First, the bridge is tied to your new mortgage, so negotiating it belongs in the same conversation as the mortgage rate, not after the purchase is signed. Second, no bank prints a bridge price, which means the margin over prime is negotiable. Mortgage broker guides published in 2026 mostly quote bank bridges at prime plus two to four points, with an administration fee of roughly $200 to $500 that some banks waive for their own mortgage clients.
How much you can bridge
TD's own example is the clearest: a home worth $300,000 with $200,000 owing may support a $100,000 bridge, reduced by an estimate of closing costs. In practice that means your sale price, minus the mortgage payout, minus the real estate commission plus HST on it, minus legal fees and any prepayment penalty on the old mortgage. Many buyers need to bridge only the down payment on the new home, not the full equity, and borrowing less shortens the interest bill in direct proportion.
The new mortgage still has to pass the federal stress test. OSFI kept the minimum qualifying rate for uninsured mortgages at the higher of 5.25% or your contract rate plus two points, and adding a bridge does not change that. With a firm sale in hand, banks generally treat the bridge as a short advance of your own equity rather than a second long-term debt; without one, they will test whether your income carries both homes at once.
What it costs: a $200,000 bridge at today's prime
The figures below use prime at 4.45% and simple daily interest. The bank columns are interest only; add the admin fee and a legal charge that lawyers commonly bill at about $200 to $350 for a simple bridge, more if the lender registers a charge on title for a large or long bridge.
| Days between closings | Bank at prime + 2% (6.45%) | Bank at prime + 4% (8.45%) |
|---|---|---|
| 30 days | $1,060 | $1,389 |
| 60 days | $2,121 | $2,778 |
| 90 days | $3,181 | $4,167 |
A private bridge, used when the sale is not firm, is priced very differently. Broker quotes in 2026 commonly run around 8% to 12% in first position, a lender fee of 1% to 3% of the loan, $1,500 to $2,500 in legal and appraisal costs, and a three-month minimum interest period even if you sell sooner. On the same $200,000 at 10% with a 2% fee, the minimum interest plus the fee alone is about $8,930 before legal and appraisal costs:
The bank bars assume a $350 administration fee; the private bar applies three months of minimum interest and a $4,000 lender fee. The difference is the price of not having a firm sale, and it is the number to weigh before you remove the sale condition from an offer or buy before listing.
When the sale falls through
A bridge is a separate debt with its own due date. If your buyer fails to close, the bridge does not disappear: you now carry the old mortgage, the new mortgage and the bridge, plus two sets of property taxes, insurance and utilities, and at the end of the term the lender can demand repayment. Your remedy is against the buyer, who normally forfeits the deposit and can be sued for the shortfall if you resell for less and for your carrying costs, but that takes months. This is why a bank asks for an unconditional agreement and why a large deposit from your buyer is worth more to you than a slightly higher price with a small one.
A second trap is the deposit on the purchase itself. The deposit you pay with your offer is due within days, long before any bridge, and in most provinces the buyer's deposit on your old home sits in a brokerage or lawyer's trust account until closing. You cannot count on it to fund your own deposit unless both sides sign a release.
Alternatives worth pricing first
- Matching closing dates. Same-day or next-day closings cost nothing extra, but a delayed wire or discharge can leave you waiting on the moving truck; a gap of one or two business days is the safer version.
- A home equity line of credit set up before you list. A HELOC is limited to 65% of the home's value on its own, or 80% combined with a mortgage, and many lenders will not open one on a property that is already listed for sale.
- Selling first with a long closing or a rent-back. You know your proceeds before you buy, at the cost of rent or the risk of moving twice.
- Porting your mortgage. Moving the existing mortgage to the new home can avoid a prepayment penalty, which on a fixed rate is the greater of three months' interest or the interest rate differential and on a variable rate is three months' interest. Each lender sets its own window between the sale and the purchase, so ask for it in writing before you choose closing dates.
If you are also shopping for the new mortgage, compare the bridge terms alongside the rate on our Canadian mortgage rates page, and get a written pre-approval that mentions the bridge before you firm up an offer. A private or hard-money lender is the fallback when the sale is not firm, and the cost table above shows why it should stay the fallback.