Bridge Financing in BC: How to Buy a New Home Before Selling Your Current One

April 5, 2026 | Posted by: Alex Vinarski

Bridge Financing in BC: How to Buy a New Home Before Selling Your Current One

You've found your dream home. The offer is accepted. There's just one problem: you haven't sold your current home yet, and you don't have the cash for the down payment on the new property without the equity from your existing home.

The Key Distinction: Bank Bridge Loans vs. Private Bridge Loans

Not all bridge financing is the same. The rules and requirements differ significantly depending on whether you go through a traditional bank or a private lender.

Bank Bridge Loans (Traditional)

Banks will only provide bridge financing under specific conditions:

• You must have a firm sale contract on your current home

• The completion date for your current home must be after you take possession of your new home

• The sale must be unconditional (no subject to financing, inspection, etc.)

In this scenario, the bank is essentially advancing you the equity from your current home before the sale closes. It's a very safe loan for the bank because the sale is already guaranteed.

Best for: Homeowners who have already sold their current home with a firm contract but need access to those funds before the closing date.

Private Bridge Loans (Flexible)

Private lenders operate differently. They don't require a firm sale contract on your current home.

• No firm sale needed – you can be actively marketing your home or even just planning to sell

• Approval is based on the equity in your current home, not a guaranteed sale

• Higher rates and fees reflect the increased risk for the lender

Best for: Homeowners who want to buy before selling but don't have a firm offer yet on their current property.

Another Option: Deposit Financing

There's also a less common but very useful solution called deposit financing.

Here's how it works:

• You have a firm offer to sell your current home

• You need funds for the down payment on your new property

• Instead of registering a mortgage, the lender advances the funds directly

• Your lawyer holds these funds and repays the lender directly from the sale proceeds when your current home closes

The key advantage: This doesn't register as a mortgage on your title. It's a simpler, faster transaction with lower legal costs.

Best for: Homeowners who have a firm sale contract and need down payment funds for their new purchase.

Quick Comparison

How Bridge Loans Work with Private Lenders

Since private bridge loans are more flexible, let me explain those in more detail.

What private lenders look for:

• Sufficient equity in your current home (typically 35%+)

• A realistic plan to sell (priced appropriately, actively listed, or soon to be listed)

• A clear exit strategy

Typical terms:

• Interest rates: Higher than bank rates (typically 8-12%)

• Lender fee: Usually 2-4% of the loan amount

• Term: 3-12 months, sometimes extendable

The process:

1. You find a new home and make an offer

2. I arrange a private bridge loan based on your current home's equity

3. Funds are advanced for your down payment

4. You move into your new home

5. Your current home sells (could be weeks or months later)

6. Sale proceeds repay the bridge loan

Real-Life Examples

Example 1: Bank Bridge Loan (Firm Sale in Place)

A homeowner has a firm contract to sell their current home for $900,000, closing July 15th. They find a new home closing July 1st. The bank provides a bridge loan for the down payment using the guaranteed sale proceeds. No private lender needed.

Example 2: Private Bridge Loan (No Firm Sale Yet)

A homeowner wants to buy a new home but hasn't listed their current one yet. They have $500,000 in equity. A private lender provides a bridge loan for the down payment based on that equity. The homeowner moves in, lists their old home, and repays the loan when it sells.

Example 3: Deposit Financing (Firm Sale, Simple Solution)

A homeowner has a firm sale on their current home. They need a $100,000 down payment for their new purchase. Instead of a traditional bridge loan, the lender advances the funds directly, and the lawyer repays it from sale proceeds. No mortgage registered, lower legal fees.

The Bottom Line

Choosing the right solution depends entirely on your specific situation:

• Have a firm sale contract? A bank bridge loan or deposit financing may be your best, cheapest option.

• Still need to sell? A private bridge loan gives you the flexibility to buy first.

• Need simplicity? Deposit financing avoids registration and legal complexity.

Ready to Bridge the Gap?

Not sure which option fits your situation? That's where I come in. As a mortgage broker with access to both traditional banks and private lenders, I can assess your situation and recommend the most cost-effective solution.

Contact me today for a free, confidential consultation. Let's discuss your timeline, your equity, and the best way to get you into your new home.

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