Bridge Loan Calculator Canada

Why the closing-date gap exists — and how the loan is actually priced

The gap: two closings, two contracts, one calendar

A bridge loan exists because your purchase and your sale are two separate transactions with two separate closing dates on two separate agreements of purchase and sale. Sellers and buyers negotiate each date independently, and a lender is not party to either negotiation — so the two dates lining up exactly is common but never guaranteed. When the purchase closes first, your new mortgage funds on that date, but the down payment or equity you're counting on from your current home is still locked inside a sale that hasn't closed yet. The bridge loan advances against that trapped equity for the days in between, then is repaid in full the moment your sale closes and the lawyer's trust account receives the proceeds.

Every major Canadian lender requires a firm, unconditional sale agreement on your current home before approving a bridge loan — a listing, or a sale still subject to conditions, does not qualify (RBC Royal Bank and TD Canada Trust bridge financing pages, both checked 2026-08-31). That requirement is what keeps the loan short: the lender already knows the exact date its money comes back.

Interim financing, not a registered second mortgage

A bridge loan is priced and structured differently from your mortgage because it isn't secured the same way. A mortgage is a registered charge against title, recorded at the provincial land registry — Teranet in Ontario, the Land Title and Survey Authority in BC, the Registre foncier in Québec — and discharging or replacing one always runs through a lawyer and a registration fee. Most bridge loans skip that: the lender takes interim security instead, typically a PPSA (Personal Property Security Act) notice in the common-law provinces or a hypothec in Québec, rather than registering a full mortgage charge against your current home (nesto, a federally regulated Canadian mortgage lender, checked 2026-08-31). That's the practical reason bridge financing carries a flat admin fee instead of full mortgage-style closing costs — and also why, on a larger bridge amount, some lenders choose to register a lien after all, which pushes legal costs higher (see below). If you're also breaking your existing mortgage early to free up that equity, the penalty is a separate cost the bridge loan doesn't cover — model it with the Canadian mortgage penalty calculator before you commit to a bridge.

Per-diem interest: how the daily cost is actually calculated

Bridge loan interest accrues daily on the full loan amount, not monthly like a mortgage — because the loan might run 6 days or 86 days, and the lender prices it by the day it's actually outstanding. The formula lenders use is:

Daily interest = (bridge loan amount × annual interest rate) ÷ 365

At a bridge rate of prime + 2.2% — prime is 4.45% CAD as of August 2026, giving roughly 6.65% (Bank of Canada policy rate, held at 2.25% since its 2025-10-29 cut and most recently confirmed 2025-12-10; major bank prime rate pages, checked 2026-08-31) — a C$370,000 bridge loan costs about C$67 per day. Multiply by the number of overlap days, and add the flat admin fee, to get the total bridge cost — exactly what the calculator above does for your own numbers.

Worked example: a C$900,000 Ontario purchase, step by step

The number most bridge loan calculators get wrong is not the interest rate — it is the size of the loan. A lender does not advance your whole equity. It advances what you have to put on the table on the purchase closing date, and nothing more. Here is the full chain in Canadian dollars, for an Ontario seller buying at C$900,000 with a 20% down payment while selling a home worth C$750,000 with C$350,000 still owing:

Note the two numbers that never meet: the sale releases C$357,625, but only C$180,000 of it is ever borrowed. The remaining C$177,625 is money you are owed, not money you are charged interest on. Sizing a bridge against the whole equity instead of against the down payment roughly doubles the interest figure — which is exactly what this calculator did until 22 September 2026, and it is corrected above.

Once the sale funds and the bridge is gone, what remains is an ordinary Canadian mortgage of C$720,000. The calculator prices it the Canadian way — fixed rates compound semi-annually under the Interest Act, not monthly as in the United States — and also shows the payment at the OSFI B-20 minimum qualifying rate, the greater of your contract rate plus 2% and a 5.25% floor. That qualifying payment is the one a federally regulated lender tests you against; it is not the payment you make. At 20% down there is no default insurance to pay. Below 20% the mortgage needs CMHC (or Sagen, or Canada Guaranty) insurance and the premium is added to the loan — there is no PMI and no FHA in Canada, and no 30-year fixed term.

Administration and legal fees

On top of per-diem interest, expect a lender admin (setup) fee of roughly C$400–C$500, and a separate legal fee of about C$200–C$300 for a straightforward bridge where no lien is registered against your home (WOWA.ca, checked 2026-08-31). If your bridge amount is large enough that the lender does register a lien — more common past the high hundreds of thousands — total legal and setup costs can run C$700–C$2,500 CAD instead, since your lawyer now has to prepare and register formal security rather than a simpler PPSA notice. These fees are separate from — and in addition to — the legal and land-transfer costs on the purchase itself; run the Canadian closing costs calculator for those, and the Canadian mortgage calculator to see what your payment looks like once the bridge is gone and only the new mortgage remains.

What happens if your sale closes late

If your current home's sale slips past the bridge loan's term, you generally have to negotiate an extension — at extra cost, and a lender is not obligated to grant one (Ownright, an Ontario real estate closing-services provider, checked 2026-09-11). Because per-diem interest above keeps accruing on the full outstanding bridge amount for every day the loan is outstanding, a late closing doesn't just risk an extension fee on top — it adds interest for every extra day, on the same daily formula used above, until the sale actually funds.

If the delay is your buyer's fault — they fail to close on the agreed date — that is an anticipatory breach of the agreement of purchase and sale under Ontario law, and you (the seller) are not required to grant an extension at all. Real estate lawyers who do negotiate one commonly attach conditions: the buyer covering your ongoing mortgage interest or bridge loan costs for the extension period, an additional deposit, and reimbursement of the extra legal fees the delay causes (Durham Lawyer LLP, an Ontario real estate law firm, checked 2026-09-11). If no extension is agreed, the seller's remedies are to relist and resell the property and pursue the buyer for the difference — not something a bridge loan itself resolves.

The worst case is the sale collapsing outright rather than merely closing late: you can end up carrying your old mortgage, your new mortgage, and the bridge loan at the same time, with the bridge still due at the end of its own term regardless of what happens to the sale (NerdWallet Canada, checked 2026-09-11). This is exactly why every major lender insists on a firm, unconditional sale agreement before approving a bridge loan in the first place — that requirement protects the lender from this scenario, not you, so build your own buffer into the overlap days rather than assuming an extension will be there if you need it.

Bridge loans by province — where the mechanics actually differ

The rate and fee ranges above are national. What changes by province is the legal machinery underneath the loan — and the split that matters is Quebec's civil law versus every other province's common law, not a difference between, say, Ontario and Alberta.