🔍 Summary: Bridge Financing in Canada

In this article, you’ll learn what bridge financing is, how it applies to multifamily investors in Canada, and when it’s the best solution for short-term capital needs. We’ll walk through average costs, current interest rates, documentation requirements, and how to use a bridge financing calculator to test scenarios. Whether you’re in between a CMHC approval or refinancing strategy, this guide breaks down what to expect.

Bridge Financing in Canada for Real Estate: A Multifamily Guide

Bridge financing is a short-term lending solution that helps real estate investors “bridge the gap” between buying and stabilizing a property. In Canada, it’s increasingly popular among multifamily borrowers who need fast capital while waiting on longer-term funding like CMHC-insured loans or private takeouts.

This guide explains what bridge loans are, how to qualify, how much they cost, and when they make the most strategic sense in your investment journey.

📌 What Is Bridge Financing?

A bridge loan is a short-term loan, usually 6 to 18 months, that provides immediate cash to close a transaction, refinance debt, or execute a value-add plan. It’s not designed for long-term holds but to buy time while arranging permanent financing.

Typical use cases include:

• Acquiring a property before CMHC approval is finalized
• Covering capital improvements pre-refinance
• Buying off-market deals with short timelines
• Waiting on equity injection or LP closing

📚 Compare CMHC vs Bridge Loans

🏘️ When Should You Use Bridge Financing?

Bridge loans work well when:

• You’re in a tight closing window (under 30 days)
• The property has deferred maintenance or cash flow gaps
• You’re executing a repositioning plan before refinance
• Traditional lenders won’t fund until full stabilization

They’re also ideal for borrowers using private capital or partnering with a commercial mortgage broker in Edmonton or other active CRE markets.

📈 Average Bridge Loan Rates 

🔎 These bridge finance rates reflect non-institutional lending, often funded by Mortgage Investment Corporations (MICs) or private funds.

💰 Cost of Bridge Financing: What to Expect

The total cost of bridge financing includes more than the interest rate. You should account for:

• Lender fee: 1–3% of loan amount
• Legal fees: $3,000 – $7,000
• Appraisal & inspection costs

🧾 Cost Considerations in High Ratio Financing

Whether using CMHC-insured loans or collateral-based private financing, multifamily borrowers should budget for all the borrowing costs, not just interest rates.

Here’s what to include in your project financials:

• Lender Fee: 1%–3% of loan amount
• Mortgage Broker Fee: ~1% (especially common in private or bridge financing deals)
• Legal Fees: $3,000–$7,000 (varies by province and deal structure)
• Appraisal & Inspection Costs: Required for CMHC, private lenders, and even renewals
• CMHC Insurance Premium: 5%–7% of loan amount (depending on LTV and MLI Select scoring)
  

📉 Want to test your project’s carrying cost? Use our Spring Financial Loan Calculator to model your timeline and cash flow.

🧾 Required Documents for a Bridge Loan

Bridge lenders require basic but solid documentation:

• Purchase and Sale Agreement
• Appraisal report 
• Rent roll and current leases
• Renovation or value-add plan
• Exit strategy (CMHC takeout, refinance, or sale)

📂 Learn about our full checklist in the Capital Raising Guide

🔍 Calculator: Model Your Bridge Loan Cost

Use our bridge financing calculator Canada to:

• Estimate monthly interest payments
• Compare bridge vs. conventional financing
• Adjust for delayed CMHC or LP funding
• Test holding period sensitivity

💡 Try the calculator now or contact us to run a full pro forma.

🧩 Conclusion: Is Bridge Financing Right for Your Deal?

Bridge loans are a powerful tool when speed and timing matter more than cost. If you’re navigating a tight closing, waiting on CMHC approval, or restructuring your equity, bridge financing offers unmatched flexibility. Just be sure to account for costs, model your exit, and work with experienced lenders.

📞 Talk to our advisors to find the right bridge solution for your multifamily investment.

❓ FAQs – Bridge Financing for Multifamily Projects

What is a bridge loan in real estate?
It’s a short-term loan used to bridge the gap between property purchase and long-term financing.

How much does bridge financing cost in Canada?
Expect rates between 8–12%, plus lender fees (1–3%) and legal costs. Second mortgages cost more.

Is bridge financing only for distressed properties?
No. Many investors use it for quick acquisitions, renovations, or waiting for CMHC approval.

Can I use bridge financing with CMHC takeout?
Yes. It’s a common strategy. Bridge loans buy time while CMHC finalizes underwriting.

How long does it take to get a bridge loan?
Closings can happen in 5–10 business days with a complete file.

🔗 External Resources

• CMHC
• OSFI Lending Regulations

Smart Capital helps real estate investors secure fast, flexible bridge financing across Canada, tailored for multifamily success.