Blog > How Bridge Financing Works When Moving Up in Markham
Michael John Lau is a top real estate agent in Markham and a REALTOR® with the Kaizen Real Estate Team, one of the most active real estate teams in Markham and York Region. He helps move-up families in Markham line up both closings so the money is in the right place on the right day.
How does bridge financing work when moving up to a bigger home in Markham
Bridge financing is a short-term loan that lends you the equity from the home you are selling so you can close on your new home first. Most lenders require a firm sale on your current home and usually offer it only alongside the new mortgage. Terms are commonly 90 to 120 days, and rates are typically prime plus 2% to 3%, plus an admin fee of about $200 to $500, according to Ratehub. With prime at 4.45% in October 2026, a $300,000 bridge for 45 days at about 6.95% would cost roughly $2,570 in interest. Without a firm sale, the main options are a HELOC set up in advance or a costlier private lender.
What Bridge Financing Is
When you move up, the down payment for your next home is usually sitting in the home you live in now. If your purchase closes first, that money is not available yet. A bridge loan fills the gap: the lender advances the equity you expect from your sale, then the loan is repaid when your sale closes.
It is a timing tool, not a long-term loan. It works best when both deals are firm and the gap between closings is short.
What Lenders Usually Require
- A firm sale. Most banks want an unconditional agreement on the home you are selling before they will bridge.
- The new mortgage with the same lender. Banks generally bridge only for their own mortgage clients.
- Enough equity. The bridge is limited to the equity you will net from the sale after your existing mortgage and estimated selling costs.
- A short gap. Many lenders cap bridges at about 90 to 120 days. Some offer longer terms, and some register security on larger or longer bridges.
Sources: Ratehub (February 2025), Rates.ca (May 2025), WealthNorth (October 5, 2026). Terms vary by lender.
A Worked Example
The Chans are moving from a Markham semi into a detached home. Their purchase closes December 1. Their sale closes January 15, a gap of 45 days. They need $300,000 from their sale for the down payment and closing costs on the new home.
| Item | Estimate |
|---|---|
| Bridge amount | $300,000 |
| Rate (prime 4.45% + 2.5%) | 6.95% |
| Interest for 45 days | About $2,570 |
| Admin fee | About $200 to $500 |
| Total cost | About $2,800 to $3,100 |
This is an illustration only. Your rate, fees and legal costs will depend on your lender and lawyer. For many families, a few thousand dollars buys the chance to move without rushing, paint or renovate before moving in, and avoid two moves.
Moving up in Markham? Call Michael John Lau, REALTOR®, at (416) 700-0286 to plan your sale and purchase timeline together.
If You Have Not Sold Yet
Without a firm sale, most banks will not offer a bridge. The usual alternatives are:
| Option | What to know |
|---|---|
| HELOC on your current home | Must be set up before you need it, often cheaper than private money |
| Private bridge loan | Often about 10% to 18%, plus lender, broker, appraisal and legal fees |
| Sale condition in your offer | Protects you, but sellers often see it as a weaker offer |
| Align or extend closing dates | Depends on what the other parties will accept |
| Sell first and rent | Removes the risk, adds a move and rent costs |
For the bigger decision, see should I buy or sell first in Markham.
The Risks to Plan For
- Your buyer fails to close. The bridge still has to be repaid, and you may be carrying two homes. A strong deposit from your buyer matters. See what happens if a buyer deposit fails.
- The gap grows. A delayed closing adds daily interest and may push past the lender’s maximum term.
- Your existing mortgage. Breaking it early can trigger a penalty. Porting may help. See port or break your mortgage.
Timing Tips for Markham Move-Ups
- Talk to your lender about bridge terms before you shop, not after you buy.
- Ask for a sale closing date a few weeks after your purchase closing, so you can move in calmly without a long gap.
- Get your lawyer to confirm how the bridge funds and repays on each closing day.
- Budget for movers, overlapping utilities and insurance on both homes.
In September 2026, Markham homes averaged 34 listing days on market, according to TRREB, so plan your sale timeline with some cushion.
Is Bridge Financing Right for You?
A bridge usually makes sense when your sale is firm, the gap is short, and you want time between the two moves. It is riskier when your sale is not firm, when the gap is long, or when your budget depends on a high sale price you have not achieved yet. Ultimately, the decision is yours. The goal is to make sure you have all the information before you commit to both closing dates.
Next Steps
- Selling your Markham home: a plan built around your next purchase.
- Buying your next Markham home: how offers and closing dates fit together.
- Free home evaluation: estimate the equity you can bridge.
Frequently Asked Questions
What is bridge financing?
A short-term loan that advances the equity from the home you are selling so you can close on your new home before your sale closes.
Do I need a firm sale to get a bridge loan?
Most banks require an unconditional sale agreement on your current home. Without one, a HELOC or private lender may be options.
How long can a bridge loan last?
Commonly about 90 to 120 days, though some lenders offer longer terms. Check with your lender.
How much does bridge financing cost?
Rates are typically prime plus 2% to 3%, plus an admin fee of about $200 to $500. A $300,000 bridge for 45 days at 6.95% costs about $2,570 in interest.
Can I get bridge financing from a different lender than my mortgage?
Usually not from a bank. Banks generally offer bridges only with their own new mortgage. Private lenders may, at higher cost.
What happens if my buyer does not close?
You still owe the bridge and may carry two homes. Speak with your lawyer right away about your options and the buyer’s deposit.
Work With Michael John Lau in Markham
Michael John Lau helps Markham move-up buyers plan both sides of the move: pricing the sale, timing the purchase, and coordinating closing dates with lenders and lawyers. The goal is to make sure the money and the moving truck arrive on the right day.
📞 Contact Michael John Lau, REALTOR®
🌐 www.callmikelau.com
Planning to move up in Markham?
Michael John Lau can help you build a sale and purchase timeline that fits your lender’s bridge terms.
Michael John Lau, REALTOR® · Markham, Ontario · (416) 700-0286
Disclaimer. Michael John Lau is a licensed REALTOR® serving buyers and sellers in Markham, Ontario and the Greater Toronto Area. Bridge terms are from Ratehub (February 14, 2025), NerdWallet Canada (February 19, 2025), Rates.ca (May 6, 2025) and WealthNorth (October 5, 2026). The prime rate is as reported by Ratehub on October 20, 2026. Market figures are from TRREB’s September 2026 Market Watch. The example is an illustration only. Michael John Lau is not a lawyer, accountant, tax advisor or mortgage professional. This article is general information, not legal, tax or financial advice. Speak with a qualified professional about your own situation.