The perfect house rarely waits for your current one to sell. When your purchase closes before your sale does, bridge financing carries you across the gap, and used properly, it's one of the cheapest conveniences in real estate.
What it is
A bridge loan is a short-term facility (days to a few months) secured against your existing home's equity. It fronts the down payment for the new purchase; when your sale closes, the proceeds repay the bridge automatically through your lawyer.
What it costs
More than a mortgage, less than people fear: typically prime plus 2-5% plus a setup fee of a few hundred dollars. On a $300,000 bridge for 30 days, the interest is roughly $2,000-2,500, cheap insurance against moving twice, storage, or capitulating on your sale price to match dates.
The catch: you generally need a firm sale
Most bank bridge programs require an unconditional accepted offer on your existing home. Selling firm before buying is the clean path. If you've bought first and your home hasn't sold, or your buyer's conditions haven't cleared, bank bridges dry up, and private bridge lending steps in at higher pricing. It works, but the exit plan matters enormously.
When a bridge beats the alternatives
- You want to renovate or paint the new home before moving in.
- Closing dates missed each other by weeks and neither side will move.
- A strong market gives you confidence to buy first and sell properly, rather than dumping your home to hit a date.
Get it arranged early
The frustrating bridge files are the ones that start five days before closing. Tell your broker about mismatched dates the moment they appear, arranging the bridge alongside the main mortgage costs nothing extra and removes the deadline panic entirely.
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