Quick Answer:
A bridge loan helps Hamilton homeowners unlock the equity in their current home to cover the down payment, closing costs, and moving expenses for a new purchase, before their existing property officially sells. Most bridge loans are short-term, interest-only loans lasting up to six months, and allow you to borrow up to 90% of the combined value of both homes. Traditional lenders often require a firm sale agreement before releasing funds, but alternative mortgage brokers can close in as little as 48 hours, even when your buyer’s offer is still conditional. In the sections below, you’ll learn how bridge financing works, how to qualify, and what happens if the deal on your old home falls through.
What Counts as a Bridge Loan in Ontario?
A bridge loan is a temporary mortgage secured against your existing home. The full amount is repaid when the sale closes or after six months—whichever comes first. In Hamilton, this type of financing is often used when a homeowner buys a new home before their current property closes.
Bridge loans are popular in fast-moving markets where competitive offers require firm purchase commitments before a sale is finalized.
Qualifying When Your Sale Is Conditional
While major banks typically require your current home to be under firm contract (no conditions) before approving a bridge loan, alternative lenders offer more flexibility.
If your buyer has included financing or inspection conditions, many private lenders will still approve your bridge loan based on:
- A Comparative Market Analysis (CMA)
- Your home equity position
- Proof of income and ability to carry short-term debt
This is especially helpful when your sale isn’t fully firm, but you need to move forward with your next purchase without delay.
Payment Structure & One-Time Fees
Bridge financing is designed to minimize monthly payments while you transition between homes. Most loans:
- Are funded in a single lump sum
- Require interest-only payments, not principal
- Have terms of 30–180 days
- Include a setup fee (1–3%), legal fees, and appraisal costs
Since these are short-term, many homeowners treat them as a convenience cost of moving smoothly, especially in a competitive market like Hamilton.
Exit Strategies if Your Buyer Backs Out
Sometimes, things don’t go as planned. If your buyer walks away or the deal falls through, brokers can help you pivot quickly:
- List the home again at a more competitive price to attract new offers
- Convert the bridge into a short-term private mortgage to buy time and maintain ownership
- Extend the bridge loan for another 30 to 60 days (an extension fee applies)
A strong mortgage broker will help you stay ahead of timelines, communicate with lenders, and protect your credit and closing.
Final Thoughts: Why Use a Broker for Bridge Financing?
Bridge loans involve complex timing, lender rules, and property evaluations. That’s why working with a local Hamilton mortgage broker gives you a major advantage. Brokers have access to multiple alternative lenders who can fund quickly, even without a firm sale, and ensure that your move doesn’t fall apart due to financing gaps.
If you’re buying before you sell in Hamilton, let Burke Financial help you unlock equity and close with confidence.
📞 1-866-702-9394 | 🌐 www.burkefinancial.ca
