Bridge Financing
Short-term capital that closes the gap between buying, building, or refinancing — funded in as little as 5 days, secured against the asset rather than a stack of income documents.
Current bridge rates
7.75–14.5%
Interest-only, 6–36 month terms, up to 80% LTV. Actual rate depends on property type, leverage, and borrower experience.
In short
Bridge financing is a short-term, asset-secured loan — typically 6 to 36 months — used to cover a funding gap until permanent financing, a sale, or another capital event closes it out. Rates currently run 7.75% to 14.5% APR depending on leverage and property type, with most deals closing in 5 to 21 days.
What is bridge financing?
Bridge financing is a short-term loan secured by real estate or business assets, structured to carry a borrower from one financial position to the next. It “bridges” the timing gap — between buying a new property and selling an old one, between acquiring an asset and refinancing it with permanent debt, or between winning a contract and collecting on it.
Unlike a conventional mortgage or term loan, a bridge loan is underwritten primarily on the value of the collateral and the strength of the exit strategy, not years of tax returns. That’s what allows it to close in days rather than months — and why it costs more than long-term financing.
Who uses bridge financing
- Real estate investors acquiring a property before renovation income or lease-up stabilizes it for permanent financing.
- Homeowners buying a new home before their current one sells.
- Developers funding renovation or construction ahead of a construction-to-permanent takeout loan.
- Business owners covering a working-capital gap ahead of a receivable, contract payout, or equity round.
How a bridge loan works
Application & asset review
You submit the property or business details, exit strategy, and basic borrower information. Underwriting focuses on collateral value (LTV/ARV) and the credibility of the exit plan.
Term sheet
We issue a term sheet within 24–48 hours outlining rate, points, LTV, and term — before any hard costs are incurred.
Underwriting & appraisal
Title, appraisal or broker price opinion, and collateral documentation are ordered in parallel to keep the timeline compressed.
Closing & funding
Most files close in 5–21 days. Funds are disbursed at closing, typically as an interest-only loan with principal due at maturity.
Exit
The loan is repaid through the sale of the asset, a refinance into permanent debt, or another defined capital event at or before maturity.
Current bridge loan rates & market trends
Published bridge loan rates in September 2026 span roughly 7.75% to 14.5% APR nationally. Where a specific deal falls in that range depends mainly on leverage (LTV), property type, and how “stabilized” the asset already is.
| Property / deal type | 65–70% LTV | 70–75% LTV | 75%+ LTV | Typical term |
|---|---|---|---|---|
| Single-family residential | 8.5%–9.5% | 9.5%–11.0% | 11.0%–13.0% | 6–18 mo |
| Stabilized multifamily (5+ units) | 8.5%–9.75% | 9.75%–11.0% | 11.0%–12.5% | 12–36 mo |
| Mixed-use / retail | 9.0%–10.5% | 10.5%–12.0% | 12.0%–13.5% | 12–24 mo |
| Value-add / heavy rehab | 9.5%–11.0% | 11.0%–12.5% | 12.5%–14.0% | 12–24 mo |
| Ground-up construction | 10.5%–12.0% | 12.0%–13.5% | 13.5%–14.5% | 12–36 mo |
Current bridge loan rates & market trends
Rates rose sharply from a 2021 baseline near 7.5% to a 2023 peak above 12%, tracking the broader rate-hike cycle. Since then, pricing has eased roughly 150–200 basis points as the Fed funds rate stabilized and lender spreads compressed, though rates remain well above pre-2022 norms.
Bridge loans vs. the alternatives
A bridge loan isn’t always the cheapest way to close a funding gap. Here’s how it stacks up against the most common alternatives.
| Type | Best for | Typical rate | Max LTV | Speed |
|---|---|---|---|---|
| Institutional / debt-fund bridge | Stabilized or light-lift assets, strong sponsors | 7.75%–9.5% | 70–75% | 2–4 weeks |
| Bank bridge / mini-perm | Near-stabilized property, existing bank relationship | 7.75%–9.0% | 65–70% | 3–6 weeks |
| Private / hard-money bridge | Value-add, distressed, or story deals | 9.5%–13.0% | 70–80% | 5–14 days |
| Construction bridge | Ground-up or major renovation | 10.5%–14.5% | 65–70% | 3–6 weeks |
| Business bridge loan | Working capital, receivables, contract gaps | 9.0%–14.0% | n/a (asset or revenue-based) | 3–10 days |
The trade-off is consistent across the table: bridge financing costs more per point of speed and flexibility. It earns its cost when a deal, a closing date, or a contract window would otherwise be lost.
Eligibility & requirements
- Equity or down payment: generally 20–35% of as-is or as-complete value.
- Credit score: most programs accept 600–650+; the strongest pricing typically requires 700+.
- Exit strategy: a documented plan to repay — sale, refinance, lease-up, or contract payout.
- Collateral: real estate, receivables, or other qualifying business assets.
- Experience: a track record of similar projects can improve pricing and leverage, though first-time sponsors are often still eligible at more conservative terms.
Costs & fees to expect
| Fee | Typical range | Notes |
|---|---|---|
| Origination points | 1–3 pts | Charged upfront as a % of loan amount |
| Interest rate | 7.75%–14.5% | Usually interest-only for the loan term |
| Appraisal / BPO | $400–$2,500 | Varies by property type and size |
| Underwriting / processing | $500–$2,000 | Flat fee, lender-dependent |
| Exit fee | 0–1 pt | Not charged by all lenders — confirm upfront |
Worked example: a $300,000 bridge loan at 10% for 9 months with 2 points would carry roughly $22,500 in interest plus $6,000 in origination points — about $28,500 in total financing cost before closing fees. Your actual cost depends on rate, points, and how long the loan is outstanding.
Pros and cons of bridge financing
Where it helps
- Funds in days, not months
- Underwritten on the asset, not just income history
- Lets you make non-contingent offers
- Flexible, negotiable structure
Trade-offs
- Higher rate than permanent financing
- Origination points add to upfront cost
- Short term creates pressure to execute the exit
- Usually requires meaningful equity or collateral
Example scenario
An investor identified a 68%-occupied, 24-unit apartment building priced below market because the seller needed a fast close. A conventional lender's 45-day underwriting timeline would have lost the deal. A bridge loan closed in 12 days at 65% LTV, funding both the purchase and a capital-improvement budget. Over 14 months, renovations brought occupancy to 94%, at which point the property refinanced into a permanent loan and the bridge loan was repaid in full.
This example is illustrative of a typical value-add scenario and does not represent a specific past transaction or a guarantee of results.
Frequently Asked Questions
What is bridge financing?
Bridge financing is a short-term loan, typically lasting 6 to 24 months, that gives a borrower immediate capital while they wait on a longer-term source of funds, such as the sale of an existing property or a permanent mortgage. It’s secured by collateral — usually real estate — and repaid in full, often through refinancing or a sale, at the end of the term.
What are current bridge loan rates?
As of September 2026, bridge loan rates generally range from 7.75% to 14.5% APR. The strongest borrowers on stabilized, low-leverage residential deals see rates near 8%, while heavy value-add, ground-up construction, or high-LTV deals price closer to 12–14.5%.
What is the maximum loan-to-value (LTV) on a bridge loan?
Most bridge lenders cap LTV between 65% and 80% of as-is or as-complete value. Stabilized residential and multifamily properties typically qualify for the higher end; ground-up construction and distressed assets are capped lower.
Is a bridge loan the same as a hard money loan?
They overlap but aren’t identical. Hard money loans are a type of bridge financing typically funded by private lenders at higher rates and shorter terms. “Bridge loan” is the broader category, which also includes bank and institutional bridge products that can price lower for stronger deals.
What credit score is needed for a bridge loan?
Many bridge lenders accept scores as low as 600–650, since underwriting weighs collateral value and exit strategy more heavily than personal credit. Scores above 700 typically qualify for the lower end of the published rate range.
Why Work With Private Mortgage In Canada?
The Independent Broker Advantage
Unlike dealing with a single direct lender, I work entirely on your behalf. By leveraging a vast network of top Canadian financial institutions and trusted private lenders, I secure bridge financing with the most competitive rates and flexible timelines tailored to your specific transaction.
Fully Licensed & Regulated
Operating under FSRA license #10557, I am strictly regulated by the Financial Services Regulatory Authority of Ontario. You are guaranteed the highest provincial standards of professional conduct, compliance, and consumer protection throughout the financing process.
Proven Track Record
With specialized expertise in the Ontario real estate market, I have a proven history of successfully structuring bridge transactions. Whether you are navigating a seamless transition for a single-family home or managing a complex commercial portfolio, my experience ensures your deals close on time without unnecessary delays.
Transparent Terms
I believe in complete financial clarity. All term sheets and mortgage commitments clearly outline your interest rates, lender fees, and any brokerage costs upfront. You will never encounter hidden fees or surprise expenses at closing.
Important disclosure: Rates, terms, and fees shown are indicative ranges as of September 15, 2026, compiled from publicly available market data and our own programs. They are not a commitment to lend and are not personalized financial or investment advice. Actual pricing depends on underwriting, property type, leverage, and market conditions at the time of application. Bridge loans carry real risk, including the risk that an exit strategy (sale or refinance) does not materialize on schedule. Consult a licensed financial or legal advisor before entering a bridge loan agreement.
Get your bridge loan term sheet
Tell us about the property or business and your timeline — most term sheets go out within 24–48 hours, with no cost or obligation.
Reviewed by a licensed mortgage broker
Faizal Garasia
Mortgage Broker, Dominion Lending Centres Mortgage House · FSRA Licence #[10557]
Faizal Garasia has arranged private and institutional mortgage financing across the GTA for 15+ years, working with homeowners turned away by their bank due to credit history, self-employment income, or timeline. This page was last reviewed for accuracy on [Aug 2026].