Your down payment on the new home is usually coming from the equity in the home you are selling. The trouble is that equity does not become cash until your sale closes. If your purchase closes first, you need the money before you have it. Bridge financing lends you that amount for the days or weeks in between, secured against the home you are selling.

It is not a mortgage on the new home, and it is not extra borrowing you carry long term. It is a temporary loan with a defined end date: the day your sale closes. On that day, your lawyer repays it in full out of the sale proceeds and it disappears.

The amount is generally based on your net proceeds from the sale, meaning the agreed sale price less the mortgage you still owe, less the real estate commission and other closing costs. Lenders are lending against money that is already committed to you by a firm agreement, so they size the loan to what will actually land in your lawyer's trust account. If you want to understand what comes off the top of a sale, our commission guide and our closing day guide cover the deductions in detail.

In a perfect world both deals close on the same day and the proceeds from your sale fund your purchase directly. That happens often, and when it does you do not need bridge financing at all. But dates do not always line up. The seller of your next home may need a specific closing date. Your own buyer may need longer. You may simply find the right home before yours has sold.

Bridge financing also buys you something practical: time to move. Owning both homes for a week means you can move gradually, clean and repair the old home properly and hand it over in good condition, rather than emptying one house and filling another in a single day.

Bridge financing is usually priced at a premium above the lender's prime rate, because it is short-term unsecured-feeling risk from the lender's perspective even though it is tied to your equity. Crucially, interest is generally charged only for the days the funds are actually outstanding, not for a full term. A bridge used for one week costs one week of interest.

On top of the interest, expect a one-time administration or setup fee. If the gap is longer, some lenders also register a lien against the property being sold, which adds legal costs. Ask your lender for the specific rate, the fee and any legal charges in writing before you commit.

Rates and fees change constantly and vary by lender and by borrower, so this guide deliberately does not quote figures. Get current numbers from your own lender or mortgage broker. For context on how rates affect the rest of your purchase, see our guide to mortgage rates and buying power.

Because interest accrues only over a short window, the total cost of a typical bridge is often modest relative to the transaction, and small compared to what a rushed same-day move or a lost purchase can cost. That said, run the actual numbers with your lender rather than assuming. A longer gap or a larger amount changes the math considerably.

Raise bridge financing with your lender or mortgage broker while you are still shopping, not after you have an accepted offer. Ask whether they offer it, what they require, what the maximum gap is and roughly what it costs. Those answers tell you what closing dates you can safely negotiate, which is far better than discovering a constraint after you are committed.

Once your buyer waives their conditions and the sale is firm, send the waived agreement to your lender. With the firm sale and your approved purchase mortgage in hand, the lender can finalize the bridge amount and terms. This usually moves quickly, but do not leave it to the final days before closing.

On the purchase closing, your lawyer uses the bridge funds together with your new mortgage to complete the deal. On the sale closing, the proceeds come in and your lawyer repays the bridge plus accrued interest and fees before releasing the balance to you. Using the same lawyer for both transactions is strongly advisable, since they are coordinating the timing on both ends.

A bridge is repaid from the proceeds of your sale. If that sale collapses after closing on the purchase, for example because the buyer cannot complete, you are left owning two properties with a short-term loan outstanding and no proceeds to repay it. This is rare with a firm sale, which is precisely why lenders insist on firm conditions being waived. It is also why you should not treat a firm sale casually, and why having your lawyer involved early matters.

During the overlap you are responsible for both homes: two sets of property taxes, utilities and insurance, plus the bridge interest. For a short gap this is minor. For a longer one it adds up, so budget for it. Also notify your insurer about the overlap, since coverage on a vacant property can be treated differently once you have moved out.