Bridge Financing in Stoney Creek and Hamilton: Buying Your Next House Before Your Sale Closes
Most people buying a house over $1 million already own one. The down payment for the next house is tied up in the current one, and the two closing dates rarely land on the same day.
This guide explains how bridge financing covers that gap and the other ways to line up two closings. Which to do first is covered in our post on buying first or selling first.
What bridge financing is
A bridge loan is a short-term loan that lets you close on the next house before the sale of your current house closes. When the sale closes, the proceeds repay the loan and its interest. As of October 2026, it generally works like this:
- A firm sale comes first. Lenders generally require a firm sale agreement on your current house, meaning the buyer's conditions have been removed. A listing or a conditional sale is usually not enough.
- Short term. Often 90 days or less, though some lenders allow longer.
- Cost. Interest is usually set above the lender's prime rate, and many lenders add a flat fee. A larger or longer loan may be registered against the house, which adds legal fees.
The loan usually comes from the lender providing your new mortgage. Ask for the rate, every fee, and the maximum amount and length.
A worked example of the gap
Every number is an example. Interest, selling costs and closing costs are left out.
| Item | Example amount | How it is worked out |
|---|---|---|
| Price of the next house | $1,500,000 | Example |
| Down payment at 20% | $300,000 | $1,500,000 x 20% |
| Deposit already paid | $75,000 | Example |
| Down payment still owing at closing | $225,000 | $300,000 minus $75,000 |
| Firm sale price of the current house | $1,000,000 | Example |
| Mortgage still owing on it | $400,000 | Example |
| Equity before selling costs | $600,000 | $1,000,000 minus $400,000 |
| Amount the bridge loan covers | $225,000 | Down payment still owing |
| Equity left after the bridge is repaid | $375,000 | $600,000 minus $225,000 |
Land transfer tax and legal fees are also due at closing (see what a house over $1 million costs to buy and own). Down payment rules are in our guide to mortgages over $1 million.
If the sale falls through
Firm is not the same as closed. If your buyer does not complete, the bridge loan is still owed and you may be paying two mortgages until a new sale closes. Your lawyer explains what you can claim from that buyer. Ask the lender, before you sign, what happens when the bridge term runs out.
Other ways to handle the gap
- Matching closing dates. No bridge loan is needed, but your purchase depends on the sale money arriving that day. A delay on one deal can hold up the other.
- A longer closing on the purchase. You get more time to sell. The seller may refuse, and a mortgage rate hold lasts only so long (often 60 to 130 days, depending on the lender).
- An offer conditional on selling your house. Sellers can refuse it, or accept it with an escape clause, which lets them keep marketing the house. If another offer they want comes in, you get written notice and a set period (48 hours, for example) to remove your condition or step aside. Removing it commits you whether or not your house has sold. See our guide to making an offer on a house over $1 million.
- A home equity line of credit set up in advance. A lender may let you borrow up to 65% of the house's value. You have to qualify, it is registered against the house (which can mean appraisal and legal fees), and it must be repaid when the house sells.
- Selling first. You know your sale price, but you may need to rent for a while and move twice.
The deposit comes first
The deposit on the new house is due on the timing written into your offer, often before your current house has sold. A bridge loan depends on a firm sale, so it may not be there in time. The money usually comes from savings, investments you can cash in, or a line of credit already in place.
The cost of owning two houses
Between the two closings you pay both mortgages, bridge interest, and property tax, utilities and insurance on both houses.
If you move out before the sale closes, tell your insurer. Many policies limit or end coverage once a house has been vacant for more than 30 consecutive days. Your insurance broker confirms the rule in your policy.
Who should be careful
- Anyone whose current house is not sold firm. A bridge loan is generally not available, and buying firm could mean owning two houses with no end date.
- Anyone whose budget only works if the sale price holds. A lower sale price means a shortfall to cover from savings or a larger mortgage.
A mortgage broker or lender confirms what is available to you. Your real estate lawyer handles both closings.
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Frequently Asked Questions
What is bridge financing in Ontario?
A short-term loan that covers the gap between closing on your next house and receiving the money from your sale.
Can I get a bridge loan if my house has not sold yet?
Generally not. Lenders usually want a firm sale agreement, with the buyer's conditions removed.
How long does a bridge loan last?
Often 90 days or less, though some lenders allow longer.
What happens to a bridge loan if my sale falls through?
The loan is still owed, and you may carry two mortgages until the house sells again.
What is an escape clause in a real estate offer?
It lets a seller keep marketing the house after accepting a conditional offer. If another offer arrives, the first buyer must remove the condition within a set period or step aside.
Want to talk through the timing for a specific house? Get in touch and we will go through it with you.
This guide is general information, not legal, mortgage or insurance advice. Lender and insurer rules change, so confirm the details with your lender or mortgage broker, lawyer and insurance broker.