Bedford move-up buyers, 21 days of bridge financing

Illustrative example

The situation

Location

Bedford, Halifax Regional Municipality

Borrower

A couple in their forties selling a Lower Sackville townhouse, both salaried

Income

$168,000 household, two T4s

Credit

Mid-700s; one car lease of $420 a month

Original price

$640,000

Down payment

$155,000

Mortgage

$485,000

Payment at 4.45%

$2,671 a month

The challenge

The Bedford offer was accepted with a closing three weeks before the buyers of their Sackville townhouse could close. Their down payment was the equity in the townhouse, which does not exist as cash until that sale funds. Without it they would have to close the purchase with money they did not have, or lose the house.

What the lender looked at

• A bridge lender requires a firm, unconditional sale on the home you are selling — an accepted offer with conditions still on it is not enough for most lenders. The Sackville sale had its financing and inspection conditions removed before the bridge was approved.
• The bridge is a short-term loan secured against the home you are selling, advanced on your purchase closing day and repaid out of the sale proceeds when the sale closes; the buyers’ lawyer held both files, so the proceeds went straight to discharge it.
• At 24% down the new mortgage is uninsured, so it is qualified at the greater of the contract rate plus 2% and 5.25%: $3,234 a month on $485,000, 28% of their $168,000 income before the car lease.
• The old mortgage was portable, which avoided a prepayment charge; broken instead, a fixed term costs the greater of an amount equal to three months’ interest on what you still owe and the interest rate differential.
• Bridge interest and the set-up fee are not published by any regulator, so no figure is stated here; the lender puts both in writing before the purchase closes.

What was done

The new mortgage was arranged first, on the Bedford price, with the down payment shown as coming from the sale. Once the Sackville buyers waived their conditions, the same lender approved a bridge for the net proceeds, secured against the townhouse, for the 21 days between closings. The existing rate was ported to the new property and the increase blended, so no penalty applied.

The outcome

Illustrative outcome: on the Bedford closing day the lender advanced the $485,000 mortgage and the $155,000 bridge; 21 days later the Sackville proceeds repaid the bridge and its interest. The mortgage over 25 years at 4.45% (chartered-bank prime rate, Bank of Canada, 2026-09-16) runs about $2,671 a month. Cash needed on the purchase day beyond the bridge: $9,600 of Halifax Regional Municipality deed transfer tax and legal fees.