Bridge Financing 101: How to Buy Your New Alberta Home Before You Sell the Old One

February 5, 2026 | Posted by: Matt Broom-Hall

Bridge Financing 101: How to Buy Your New Alberta Home Before You Sell the Old One

You found the perfect house. Your realtor is calling. The seller wants an answer by tomorrow. There's just one problem: your current home hasn't sold yet, and you need that money for the down payment.

Welcome to one of the most stressful moments in real estate, and exactly why bridge financing exists.

If you've ever tried to choreograph the perfect dance between selling your old place and buying your new one, you know the timeline rarely cooperates. Possession dates don't align. Buyers want extra time. Your dream home won't wait. And suddenly you're stuck choosing between losing the house you love or moving your family into a hotel for three weeks while you wait for your sale to close.

Bridge financing is the solution that lets you own both properties at once, without the financial acrobatics.

Let me walk you through exactly how it works, what it costs, and why Alberta homeowners in Calgary, Edmonton, and beyond use this tool every single day to make their moves seamless.

What Is Bridge Financing? (And Why You Probably Need It)

Bridge financing is a short-term loan that 'bridges' the gap between your old home's sale closing and your new home's purchase closing. It uses the equity in your current home to fund the down payment on your next property, so you can close on your new house before you get the cash from selling your old one.

Think of it as a temporary IOU from your lender, backed by the home you're about to sell.

Here's the scenario: You're buying a house in Calgary that closes on March 15th. Your current home in Edmonton is sold, but it doesn't close until April 3rd. You need $80,000 for your down payment on March 15th, but you won't have that cash until April 3rd. A bridge loan gives you that $80,000 now, and when your sale closes on April 3rd, the proceeds automatically repay the loan.

No double moves. No storage units. No explaining to your kids why they're sleeping in a Travelodge.

This isn't some obscure financing trick, it's a standard tool that thousands of Alberta homeowners use every year when life (and real estate timelines) refuse to cooperate.

How Bridge Financing Actually Works

Let's break it down with real numbers, because abstract explanations don't help anyone.

Say your current home is worth $450,000. You owe $250,000 on your mortgage. That gives you $200,000 in equity.

When you apply for bridge financing, your lender will calculate how much of that equity they can loan you. They'll subtract your remaining mortgage balance, any closing costs, legal fees, and real estate commissions, basically anything that will come out of your sale proceeds. Let's say those costs total $30,000.

That leaves you with $170,000 in available bridge financing.

If you need $80,000 for your new down payment, the lender advances that amount. You now own both homes for a few weeks. When your old home closes and the buyer's money hits your lawyer's account, that $80,000 (plus interest and fees) is automatically repaid to your lender.

Done.

The timeline for bridge loans in Alberta typically runs anywhere from a few days to 120 days, though most are structured around 30-90 days. Some lenders will extend terms up to 12 months if your situation requires it, but that's rare, and expensive.

What You Need to Qualify for Bridge Financing

Bridge financing isn't available to everyone, and lenders have specific requirements to protect themselves (and you) from risk. Here's what you'll typically need:

1. A Firm Sale Agreement

This is the big one. Your lender needs proof that your current home is sold, not listed, not 'subject to inspection,' but unconditionally sold. That means all conditions (financing, inspection, etc.) have been waived and the deal is locked in.

If your home is still conditional or just sitting on the market, most lenders won't approve bridge financing. The risk is too high that the sale falls through and they're left holding the bag.

2. Mortgage Approval on Your New Property

You'll need unconditional approval for the mortgage on your new home. Lenders want to see that the new property is financed and ready to close, this isn't a speculative loan.

3. Documentation

Expect to provide:

• A copy of your Sale Agreement (for your current home)
• A copy of your Purchase Agreement (for your new home)
• Proof of your existing mortgage balance
• Recent property appraisals or land titles

4. Enough Equity

You need equity in your current home to borrow against. If you owe $440,000 on a $450,000 house, there's not enough room for a bridge loan after costs. Most lenders want to see at least 20% equity, but that can vary.

If you're working with a broker like Hello Mortgage, we'll help you figure out whether you qualify before you start house hunting, so there are no surprises when you're ready to write an offer.

The Cost of Bridge Financing (It's Not As Bad As You Think)

Let's be honest: bridge financing isn't cheap. But because it's so short-term, the total dollar cost is usually far lower than people expect.

Here's the breakdown:

Interest Rates

Bridge loan interest rates in Alberta typically run at prime + 1% to prime + 5%, depending on the lender. That's significantly higher than a standard mortgage rate (which might be around 5-6% as of early 2026).

Let's use an example:

• You borrow $80,000 for 60 days
• Your bridge loan rate is 8.5% (prime + 4%)

The interest cost for two months would be roughly $1,133.

Yes, that's more expensive than your mortgage rate: but for 60 days of convenience and zero stress, most people consider it a bargain.

Administration Fees

Lenders typically charge a one-time setup or administration fee, which can range from $100 to $500 depending on the lender and loan size. Some lenders will waive this fee if you're bringing your new mortgage to them: always ask.

Total Cost Example

If you're bridging $80,000 for two months at 8.5%, your total cost might look like this:

• Interest: $1,133
• Admin fee: $300
• Total: $1,433

For context, that's about what you'd pay to move your family twice, rent a storage unit, and live in a hotel for two weeks. And that's before factoring in the sanity you'll save.

The Benefits: Why Alberta Homeowners Love Bridge Financing

Beyond the obvious convenience, here's why bridge financing is a game-changer for busy families upgrading homes:

1. No Double Moves

Move once. That's it. Pack your life into boxes, hire the movers, and go straight from your old house to your new one. No interim stops. No temporary rentals.

2. No Overlap in Housing Costs

You're not paying rent and a mortgage, or juggling hotel bills while your sale finalizes. The bridge loan covers the gap so you can move seamlessly.

3. Better Negotiating Power

When you write an offer with bridge financing pre-approved, you're a stronger buyer. Sellers know you can close without scrambling for cash, and that makes your offer more attractive in a competitive market.

4. Time to Renovate

Some Alberta buyers use bridge financing to move into their new home before their old one closes: giving them time to paint, renovate, or stage the old property for a better sale price.

5. Less Stress, Period

Let's not underestimate this. Real estate is already stressful. Removing the logistical nightmare of mismatched closing dates is worth every penny.

Bridge Financing in the Alberta Market

Calgary and Edmonton real estate markets move fast: especially in the spring and summer when inventory is tight and buyers are competing. If you're upgrading from a starter home in Airdrie to a family house in Sage Hill, or moving from a condo in Old Strathcona to a detached home in Windermere, timing is everything.

In Alberta, bridge financing has become a standard tool because our market operates on firm closing dates. Unlike some provinces where flexible possession arrangements are common, Alberta deals typically close on the date specified in the contract: no wiggle room.

That rigidity makes bridge financing essential for buyers who need flexibility. And because Alberta's lending market is competitive, you'll find bridge products available through most major banks, credit unions, and alternative lenders across the province.

What About the Risks?

Bridge financing is low-risk if your sale is firm. The biggest danger is if your sale falls through: suddenly you're stuck owning two properties with no way to repay the bridge loan.

That's why lenders require an unconditional sale agreement. As long as that's in place, the risk is minimal. Your old home will close, the proceeds will repay the loan, and you'll move on with your life.

If you're nervous about whether your sale is truly 'firm,' talk to your realtor and your lawyer. They'll walk you through the conditions and make sure you're protected.

How Hello Mortgage Makes Bridge Financing Simple

Here's the thing about bridge financing: it's not complicated, but it is time-sensitive. You need a lender who can move fast, coordinate with your lawyer and realtor, and structure the loan so it fits your exact timeline.

At Hello Mortgage, we work with 50+ lenders across Alberta, which means we can shop your bridge financing scenario to find the best rate, the lowest fees, and the smoothest process. We've coordinated hundreds of these deals for Calgary and Edmonton families, and we know exactly how to keep everything on track so your closing day is stress-free.

If you're thinking about selling and buying at the same time, let's talk before you start house hunting. We'll walk you through your equity position, map out your timeline, and make sure bridge financing is pre-approved and ready to go when you need it.

Because the best time to arrange a bridge loan is before you fall in love with a house that closes in three weeks.

Ready to make your move? Get in touch with our team and let's build a plan that works for your life, your timeline, and your next home.

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