Bridge Loans.
Simple, Equity-Focused Bridge Financing.
A Direct Private Mortgage Bridge Lender.
Serving Ontario & British Columbia.
What is a bridge loan?
Real Estate Bridge Lending.
A bridge loan, also known as bridge financing or a bridge mortgage loan, is a short-term loan that helps homeowners and real estate investors purchase new property before selling their existing one. In many cases, a borrower’s equity is tied up in a property they haven’t yet sold, which creates a financing gap when purchasing a new home or investment property. A bridge loan ‘bridges’ this gap, allowing you to unlock the equity in your current property and use it as a ‘down payment’ or towards closing costs on your next purchase. This type of short-term real estate financing is useful when your current property isn’t yet listed for sale or hasn’t closed, but you’ve already made an offer on a new home, commercial or industrial property. Bridge mortgage loans are secured against both the property being purchased and the existing property that will be listed and sold, thus using the net sale proceeds to pay off or pay down the bridge loan. Bridge loans are commonly used in tight timelines, competitive real estate markets, or situations where a traditional lender cannot provide timely funding solutions. Many traditional ‘A-Lenders’ and alternative ‘B-Lenders’, and ridiculously, certain private lenders, require the property our client currently owns to be sold firm, when in many cases, the current property is not even listed for sale, much less has it received conditional or firm purchase offers. At DV Capital, we specialize in arranging fast and flexible bridge loans across Ontario & British Columbia, providing borrowers access to the capital they need without needing to wait for their property to be sold conditionally, firm, or even listed for sale. Whether you’re a homeowner upgrading to a new residence or a real estate investor moving fast on an acquisition opportunity, our bridge loan solutions are tailored to your specific timing, equity, and strategy.
Types of Bridge Loan Mortgages.
Private Mortgage Bridge Loans.
Bridge loan mortgage financing is a versatile short-term solution designed to help homeowners and real estate investors manage the timing gap between purchasing a new property and selling an existing one. There are three common scenarios where bridge loans are helpful:
- Existing Property Sold Firm (Without Conditions): This is the most secure type of bridge loan for lenders. When the existing property is listed for sale and has been sold firm with no conditions, bridge loan lenders have a high degree of confidence in repayment because there is a confirmed closing date. Although there’s always some risk if the buyer defaults at closing, this situation involves the lowest risk. As a result, traditional lenders often offer the most competitive bridge loan interest rates for these firm sale transactions.
- Existing Property Listed for Sale (Without Firm Sale): In this case, the property is actively listed for sale but has not yet sold firm. This scenario carries more uncertainty because the property may remain on the market for an extended period, or the asking price might be unrealistic. Bridge loan lenders view this as a higher risk than a firm sale, since there is no guaranteed closing date or sale price, which may result in stricter underwriting and higher interest rates.
- Existing Property Not Listed for Sale: This represents the highest risk category for bridge loan lenders. When the existing property is not listed for sale, lenders have no assurance if or when it will be sold, or for what amount. In some cases, this situation resembles a ‘blanket mortgage’ or ‘inter-alia mortgage,’ where the lender secures the loan against both the new purchase property and the unlisted existing property. Given the uncertainty, private mortgage lenders typically provide greater flexibility for borrowers in this scenario, offering bridge loans with fewer conditions and faster approvals compared to traditional lenders.
How does a bridge loan work?
Bridge Loan Financing in Canada.
Understanding how a bridge loan works can be easier with a practical example. Imagine our clients want to sell their Toronto home and downsize to a new property in Muskoka. They enter into a contract to purchase the Muskoka home, with a closing date in 120 days. Meanwhile, they plan to renovate their Toronto home to maximize its resale value before listing it for sale. However, unexpected delays in renovations push back the listing process. With just weeks left before the Muskoka closing date, it becomes clear that the Toronto home won’t sell in time. The problem? Their home equity is locked in the Toronto property, making it impossible to access the funds needed for the Muskoka purchase. Although the clients have some savings, it’s not enough to cover the full Muskoka purchase price. At DV Capital, we evaluated the Muskoka purchase price, the estimated value of the Toronto home, and the existing mortgage balance. Based on this, we structured a bridge loan mortgage covering up to 100% of the Muskoka home purchase price. Here’s how it works:
A first mortgage is registered on the Muskoka property.
Simultaneously, the bridge loan is cross-collateralized as a second mortgage on the Toronto home, behind the existing first mortgage.
This setup is known as a blanket mortgage, where one mortgage secures multiple properties.
- When the Toronto home sells, the net sale proceeds will be used to pay off the bridge loan.
This blanket mortgage structure provides the lender with sufficient collateral and combined equity across both homes, mitigating risk while allowing our clients to confidently close on their new Muskoka home without waiting for their Toronto property to sell.
If you’re facing a similar situation and require fast, flexible financing to bridge the gap between buying a new home and selling your current one, DV Capital provides private bridge loans tailored to your unique real estate needs across Ontario & British Columbia. Contact us today to learn how a bridge loan can help you move smoothly from one property to the next.
Bridge Loan Example: Real Estate Bridge Financing in action.
Private Bridge Loan Lender.
Existing Property (Toronto Home):
Location: Toronto, Ontario
Anticipated Sale Price: $2,000,000
Existing First Mortgage: $500,000
New Purchase Property (Muskoka Home):
Location: Muskoka, Ontario
Purchase Price: $1,500,000
Deposit Paid to Seller: $50,000
Amount Needed to Close: $1,450,000
Bridge Loan Provided: $1,450,000
Bridge Loan Repayment:
Sale Proceeds from the Toronto Home: $1,880,000 (Net Realtor Fees + HST)
Bridge Loan Discharged: $1,450,000
Net Equity After Closing: ~$437,000
In this bridge loan mortgage example, the client had significant home equity in their existing Toronto property but needed access to that equity to close on their new Muskoka home purchase; since the Toronto home had not yet sold, DV Capital arranged a bridge loan mortgage for $1,450,000, where a first mortgage was registered on the Muskoka property and a second mortgage was registered against the Toronto property to cross-collateralize the bridge loan, and once the Toronto home sold, the bridge loan was fully repaid from the sale proceeds and both mortgage registrations (on the Muskoka and Toronto homes) were discharged, allowing the client to move into their new Muskoka home mortgage-free and with over $400,000 in net proceeds.
How is a bridge loan repaid?
Can I Get a bridge loan if my house isn't sold?
When your equity is tied up in your current property and you need to close on a new purchase, a bridge loan provides short-term funding. But how do you pay it back? Let’s break it down. Once your existing property sells, the net sale proceeds, after paying off any existing encumbrances (i.e., mortgages), real estate commissions, and applicable taxes, are used to fully repay the bridge loan. Typically, the entire net amount goes to clear the outstanding balance. However, if the proceeds fall short of the full amount, the lender may issue a partial discharge: this releases the lender’s mortgage charge from the sold property but keeps it in place against the new purchase. As soon as additional funds are available, the balance can then be cleared. Because bridge loans carry higher interest rates than traditional mortgages due to their short-term nature and elevated risk, they are specifically designed for temporary financing solutions. If you need a fast, flexible bridge loan to acquire residential, commercial, or industrial real estate in Ontario & British Columbia. DV Capital offers tailored short-term financing options to help you move forward with confidence.
How to apply for a bridge Loan?
Private Mortgage Bridge Loan Lenders.
At DV Capital, we make the bridge loan process fast, simple, and tailored to your needs, whether you’re a homeowner looking to buy a new property before selling your current one, or an investor managing multiple real estate transactions, our private bridge loan solutions are designed to help you move forward without delays by leveraging the equity in your existing property to secure the funds needed for your new purchase, even if your current home isn’t yet sold or listed for sale, and while traditional lenders often require a firm sale agreement in place to issue a bridge loan, DV Capital specializes in flexible private bridge mortgage financing that accommodates more complex situations, including cases where your property is only listed, or not yet listed at all, and we assess your equity, closing timelines, property values, and intended repayment strategy to determine eligibility, which is often based on your ability to repay the loan once your existing property sells or refinances; our team will guide you through a simplified documentation process, typically requiring property details, mortgage statements, purchase and sale agreements, and closing timelines to underwrite the loan efficiently, and to get started, you can complete our secure online bridge loan application with just a few key details, we will assess your bridge loan requirements and structure a customized bridge loan to meet your unique needs, whether the loan involves residential, commercial, or mixed-use property in Ontario & British Columbia, DV Capital delivers fast approvals, flexible terms, and expert support designed to bridge the financing gap with confidence and ease, so if you’re navigating the purchase of a property before selling your current one and need capital quickly, apply for a bridge loan with DV Capital today and take the next step forward without delays.
