A $400,000 bridge loan for 60 days costs roughly $5,960 all in, at today’s rates. That is the number most upsizing conversations never get to.
And there is a requirement underneath it that decides whether buying first is even an option for you — one that most families only discover after they have already fallen in love with a house.
“Bridge financing isn’t the expensive part of upsizing. Not qualifying for it — after you’ve made an offer — is.”
What Bridge Financing Actually Does
Bridge financing is a short-term loan that covers the gap when your new home closes before your current one does. Your lender advances money against the equity in the home you are selling, you use it for the down payment on the new place, and you repay it when your sale closes — usually within 60 to 120 days.
It exists to solve one problem: you cannot access the equity in your current home until it closes, but you need that equity to buy the next one. Bridge financing lets those two dates be different.
The Requirement That Decides Everything
Lenders will not approve a bridge unless you already have a firm, condition-free sale agreement on your current home. If your buyer’s offer still has financing or inspection conditions attached, you do not have a firm sale yet — and you will not qualify.
This single rule is what quietly settles the buy-first question for most families. It is not about how much equity you have or how strong your income is. If your sale is still conditional, bridge financing is not available to you, full stop.
Which means the real sequence is: list, get a firm offer, then shop with confidence. Not the other way around.
What It Costs Right Now
The Bank of Canada held its policy rate at 2.25% on September 2, 2026 — the seventh consecutive hold. That keeps prime at 4.45%. Bridge loans are typically priced at prime plus 3 to 4%, which puts most GTA bridge financing in the 7.45% to 8.45% range.
Here is what that costs in actual dollars, calculated at 8% — the middle of that range:
| Bridge Amount | 30 Days | 60 Days | 90 Days |
|---|---|---|---|
| $200,000 | $1,315 | $2,630 | $3,945 |
| $400,000 | $2,630 | $5,260 | $7,890 |
| $600,000 | $3,945 | $7,890 | $11,836 |
On top of the interest, budget for legal fees of roughly $200 to $300 and a lender setup fee of $400 to $500.
So a $400,000 bridge held for 60 days lands at about $5,960 all in — $5,260 in interest plus around $700 in fees. If your lender prices at the low end of the range it is closer to $5,600; at the high end, about $6,260.
Watch the term, not just the rate. Bridge interest accrues daily, so the length of your closing gap matters more than a quarter point on the rate. Going from a 60-day gap to a 90-day gap on $400,000 costs you an extra $2,630 — far more than shopping for a slightly better rate would ever save you.
Where the Market Sits Right Now
GTA Market Context — August 2026
New listings came in at 12,075, down 14.1% from a year ago. Fewer homes are coming to market, which cuts both ways for an upsizer: less competition when you sell, but less to choose from when you buy.
TRREB Chief Information Officer Jason Mercer pointed to dipping prices and steady mortgage rates keeping GTA ownership “relatively affordable” over the past year, with trade uncertainty the main thing still holding households back.
On price, be careful with the word “flat.” The MLS Home Price Index Composite was essentially unchanged from July to August — but it is still down 4.5% year-over-year. Month to month, stable. Year over year, softer.
The Equity Gap Is Wider Than It Was
Here is the number upsizers actually need, and it is not moving in your favour.
In August 2026 the average GTA detached home sold for $1,288,669. The average townhouse sold for $786,817. The gap between them — the amount you need to find to move up — is $501,852.
| Period | Detached (avg) | Townhouse (avg) | Gap |
|---|---|---|---|
| August 2025 | ~$1,312,000 | ~$861,000 | ~$451,000 |
| February 2026 | $1,325,654 | $844,862 | $480,792 |
| August 2026 | $1,288,669 | $786,817 | $501,852 |
Both prices fell over the past year. But townhouses fell harder — down 8.6% year-over-year, against 1.8% for detached. When the home you are selling drops more than the home you are buying, the distance between them grows. That gap is about $50,000 wider than it was a year ago.
I would rather you hear this from me than find it out at the mortgage office. Upsizing in this market costs more than it did last year, not less. That does not make it a bad decision — it makes it a decision you should walk into with the real number in hand.
What has improved is the buying side. Detached homes in the City of Toronto are sitting at 4.3 months of inventory, which is balanced territory — you are not bidding against six other families the way you would have been in 2021. You have room to negotiate, time to do inspections properly, and the ability to walk away. Those are worth real money, and they do not show up in an average price.
Buy First or Sell First?
Bridge financing only matters if you are buying first. The honest version of this decision:
Sell first means no bridge costs, no two mortgages, and a budget you know exactly. The trade-off is a possible gap in housing between closings, solved with a rental or family — a genuine hassle, but a predictable one.
Buy first means no housing gap and no moving twice. The trade-off is the bridge cost, the requirement for a firm sale before you qualify, and carrying two closings at once.
At 4.6 months of inventory GTA-wide, a well-priced townhouse generally moves in 30 to 60 days. That makes buy-first realistic for many families — provided you get that firm offer before you commit to anything.
I have written a fuller breakdown of that decision in should you buy or sell first in Toronto, and if you are weighing the opposite move, the downsizing guide covers that side.
Three Things to Do Before You Shop
1. Get your current home valued properly. The $786,817 average is a starting point, not your number. Condition, location and your specific pocket of the city move that figure meaningfully in both directions.
2. Get bridge pre-qualified, not just mortgage pre-approved. They are different conversations. Ask your broker two specific questions: how much bridge you would qualify for, and what the lender’s rate and setup fee actually are. It takes fifteen minutes and costs nothing.
3. Decide your timeline before you start looking. Fall or spring changes your whole strategy. Knowing which one you are committing to determines whether you should be touring homes now or gathering information for later.
Frequently Asked Questions
How much does bridge financing cost in Toronto right now?
At current rates, bridge financing runs roughly 7.45% to 8.45% — prime (4.45%) plus 3 to 4%. On a $400,000 bridge held 60 days, that is about $5,260 in interest, plus roughly $200 to $300 in legal fees and $400 to $500 in lender fees. Call it $5,960 all in, or somewhere between $5,600 and $6,260 depending on how your lender prices it.
Interest accrues daily, so the length of your closing gap drives the cost more than the rate does.
Can I get bridge financing before my home sells?
No. Lenders require a firm, condition-free sale agreement on your current home before they will approve a bridge. If your buyer’s offer still carries financing or inspection conditions, the sale is not firm and you will not qualify yet.
This is the single most common reason a buy-first plan falls apart, and it is worth confirming with your broker before you write an offer on anything.
How much do I need to upsize from a townhouse to a detached home?
On August 2026 GTA averages, the gap between a townhouse ($786,817) and a detached home ($1,288,669) is $501,852. That is the distance you need to cover through equity, new mortgage borrowing, or a combination.
That gap has widened by roughly $50,000 over the past year, because townhouse prices fell 8.6% year-over-year while detached fell only 1.8%. Your own numbers will differ from the averages, sometimes substantially.
Is bridge financing risky?
The risk is not the loan itself — it is misjudging how long your sale takes to close. Because you need a firm sale before the bridge is approved, the closing date is already known, which removes most of the uncertainty.
The real exposure is a longer gap than planned. On $400,000, every extra 30 days costs about $2,630. Build a buffer into your budget rather than assuming the tightest possible timeline.
Is now a good time to upsize in Toronto?
It depends on which side you weigh more heavily. The equity gap is about $50,000 wider than a year ago, so the move costs more in cash terms. But detached inventory in the City of Toronto sits at 4.3 months, which is balanced — you get negotiating room, proper inspection conditions and time to think.
For families planning to stay ten years, the negotiating position often matters more than a $50,000 swing in the gap. For a shorter horizon, the math deserves a much closer look.
Legal disclaimer: This article is for educational purposes only and is not financial, mortgage or legal advice. Bridge financing rates, fees and qualification criteria vary by lender and by borrower. Always confirm your specific numbers with a licensed mortgage professional and a real estate lawyer. Figures cited are from TRREB Market Watch (August 2026) and the Bank of Canada rate announcement of September 2, 2026. Averages describe the market, not your property.
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