Buying Before You Sell in Ottawa: Bridge Financing

Can you get a mortgage on your next home before your current one sells? Often yes, through bank bridge financing, but the deciding fact is usually a firm sale on the home you own now. Banks that publish their bridge financing terms describe it as a short loan against the equity in your current home, available once a firm or unconditional sale agreement is in place, and repaid when that sale closes. RBC, bridge financing TD, bridge financing If your current home is listed but not sold firm, bank bridge financing is generally not available yet, and you also need to qualify for the mortgage on the new home on its own merits.

General information as of November 10, 2026. Bank policies change and vary by lender. This is not legal advice.

What is bridge financing, exactly?

It covers a timing gap. You have bought a new home that closes first, and the money for your down payment is tied up in your current home, which closes later. A bridge loan lends you part of that equity for the days in between. When your current home closes, the sale proceeds repay the bridge loan and its interest. RBC, bridge financing

It does not replace qualifying for the new mortgage. TD, for example, says you must be approved for a TD mortgage or TD Home Equity FlexLine on the new property. TD, bridge financing

This article covers bank bridge financing only. Private bridge loans are a separate category with different costs and risks, and they are outside what this article covers.

What do lenders usually look at?

Each bank sets its own bridge policy, so treat the points below as what some banks publish, not a universal rule.

• A firm sale on your current home. RBC states that a firm sale agreement must be in place to qualify. RBC, bridge financing TD asks for a copy of the sale agreement for the home you are selling and the purchase agreement for the home you are buying. TD, bridge financing
• Your equity, after selling costs. TD's published example: a home worth $300,000 with a $200,000 mortgage may support a bridge loan of $100,000, reduced by an estimate of closing costs. TD, bridge financing
• The length of the gap. TD says bridge financing typically lets a buyer carry two properties for up to 90 days, with longer terms referred to a mortgage specialist. RBC says terms are typically six months but can range from 90 days to 12 months or longer.
• Approval on the new home. You still go through a full mortgage application for the purchase, including the stress test: for federally regulated lenders, the greater of your contract rate plus 2% or 5.25%. OSFI, minimum qualifying rate
• What happens to your current mortgage. Breaking a closed mortgage usually triggers a prepayment penalty, which can cost thousands of dollars, plus possible discharge and administration fees. FCAC, breaking your mortgage contract A portable mortgage may let you transfer your existing mortgage to the new home instead. FCAC, choosing a mortgage Some banks also describe a delayed port, where the new mortgage is advanced up to 120 days before the original is paid off. CIBC, port or replace your mortgage

What does bridge financing cost?

Expect it to cost more per day than your mortgage. TD says bridge loans have interest rates similar to open mortgages, which are often higher than the rate you pay now. TD, bridge financing RBC also notes the interest can be more expensive than conventional financing. RBC, bridge financing Ask in writing about the rate, any fees, and your lawyer's charge for the bridge.

You will also carry both housing payments for the overlap: the new mortgage, the old mortgage, property taxes and utilities on two homes.

What documents should you gather?

• The firm (unconditional) agreement of purchase and sale for your current home, including all amendments and waivers.
• The agreement of purchase and sale for the new home, with its closing date.
• Your latest mortgage statement on the current home, and any line of credit secured against it.
• A penalty and portability quote from your current lender, in writing.
• Income documents for the new mortgage application (for example, recent pay stubs and an employment letter, or tax returns and Notices of Assessment if self-employed).
• Your real estate lawyer's contact details for both transactions.

What are the common obstacles?

The sale is still conditional. A sale with an open financing or inspection condition is not firm. Until those conditions are waived, a bank will usually treat the home as unsold.

The gap is longer than the bank allows. If your current home closes months after the new one, a bank's bridge limit may not reach that far. Moving one of the closing dates is often simpler than stretching the bridge.

The equity is smaller than expected. Real estate commission, legal fees, the payout of any secured line of credit and a prepayment penalty all come off the sale price before you see the money.

When this may not be a fit

Bank bridge financing is unlikely to work right now if:

• Your current home is not sold firm. If it is only listed, or the buyer's conditions are still open, the honest next step is to wait for a firm sale, or to make your purchase offer conditional on the sale of your home. Talk to your real estate agent and lawyer about how that condition would be worded.
• The new mortgage does not qualify on its own. If your income cannot carry the new mortgage at the qualifying rate, a bridge will not fix that. Look at a lower purchase price or pay down debts first.
• The gap is long or open-ended. If you want to buy, move in, and then decide when to list, that is not a bridge situation. It is carrying two properties, and it needs a different, more conservative plan.
• The sale proceeds will not cover the bridge. If your equity after costs is thin, the bridge amount may be too small to fund the down payment.
• You are looking for a private bridge loan. That is outside what Farhoud arranges and outside this article.

Ottawa example: a 45-day gap

Illustration only, not a real client. Round numbers and assumed rates, not a quote or forecast.

A couple in Kanata sells their current home for $750,000 on a firm agreement closing in 75 days. They owe $350,000 on the mortgage. They buy a $900,000 home in Barrhaven that closes in 30 days, so the gap is 45 days.

• Equity after selling costs: $750,000 minus $350,000 owed minus an assumed $35,000 in commission and legal costs leaves $365,000.
• Cash needed on the new home's closing: a 20% down payment of $180,000 plus an assumed $20,000 in closing costs, so $200,000 of bridge financing.
• Bridge interest: at an assumed 7% annual rate for 45 days, about $1,726, before any lender or legal fee.
• New mortgage: $720,000. At an assumed 4.5% over 25 years, about $3,985 a month.
• Old mortgage during the overlap: about $1,937 a month, assuming 4.5% with 25 years remaining.

Payments use Canadian semi-annual compounding. If the sale had still been conditional, this plan would not have been available from a bank until the conditions were waived. Try your own purchase numbers in the purchase calculator, or compare options side by side in the scenario comparison calculator.

How Farhoud can help

Farhoud can review your file before you apply, so you know whether the timing works. That review looks at your sale and purchase agreements, your equity after costs, your current mortgage's penalty and portability terms, and how the new mortgage may be assessed. He can explain how different lenders may treat a bridge, identify the documents to prepare, and compare available options such as porting, bridging, or adjusting a closing date. A review may conclude that the timing is not right yet, for example because the sale is still conditional. If you would like a second look, you can request a file review. Have these ready: both closing dates, whether your sale is firm, and your current mortgage balance and lender.

Next steps

1. Confirm in writing whether your sale is firm, and note both closing dates.
2. Ask your current lender for a penalty quote and whether your mortgage is portable.
3. Estimate your equity after commission, legal costs and any secured line of credit, then run the new purchase through the purchase calculator.

Sources

• RBC Royal Bank, Bridge financing. No date shown. Accessed November 10, 2026.
• TD, Bridge financing (financing between homes). No date shown. Accessed November 10, 2026.
• CIBC, How to port or replace your mortgage. No date shown. Accessed November 10, 2026.
• FCAC, Breaking your mortgage contract. Page dated October 15, 2025. Accessed November 10, 2026.
• FCAC, Choosing a mortgage that is right for you. Page dated October 15, 2025. Accessed November 10, 2026.
• OSFI, Minimum qualifying rate for uninsured mortgages. Modified January 29, 2026. Accessed November 10, 2026.