What Is a Bridge Loan from a Private Lender in Ontario?

Stonefield Capital provides short-term bridge loans to Ontario borrowers who need to close on a new property before their existing one sells or their bank financing is ready.

What Is a Bridge Loan?

A bridge loan is a short-term mortgage that "bridges" the gap between two real estate transactions. A bridge loan differs from a conventional mortgage in that repayment is driven by a defined exit event: a property sale, a refinance, or bank approval, rather than by an amortization schedule. Terms typically run from 1 to 12 months.

When Does a Borrower Actually Need a Private Bridge Loan?

Banks and credit unions offer bridge financing, but only when a firm sale agreement is already in place on the departing property. Many borrowers face timing mismatches that fall outside that narrow condition.

• Closing date on the purchase arrives before the existing home sells.
• The existing property is listed but no firm offer has been accepted yet.
• Bank financing is approved in principle but delayed by appraisal, documentation, or underwriting timelines.
• The borrower is self-employed or carries a gap in provable income that pauses institutional approval.
• The property being purchased is non-standard (rural, mixed-use, estate sale) and falls outside bank guidelines.

In each scenario, a private bridge lender can act where a bank cannot or will not move fast enough.

How Does Stonefield Capital Underwrite a Bridge Loan?

Stonefield Capital underwrites on equity and exit, not on income alone. The core question is whether the borrower has a credible, near-term exit — a listing, a refinance commitment, or a sale timeline that can be documented. Loan-to-value and the strength of the exit together determine the approval.

Notices of Assessment are always requested to confirm there are no material CRA arrears. T4s, T2s, or bank statements may be requested to support the exit analysis, but missing income documents do not automatically kill a deal when equity is strong.

Stonefield runs its own comparable-sales analysis in lieu of a formal appraisal in most cases. This saves the borrower an appraisal fee and several days of processing time. When a formal appraisal is needed, that requirement is flagged in the initial response, never at commitment or the day before closing.

How Quickly Can a Bridge Loan Fund in Ontario?

Funding in as little as 48 hours is possible when legal counsel is ready and title is clean. The bottleneck in a fast closing is almost always legal preparation, not underwriting. Borrowers and brokers can accelerate timelines by engaging real estate lawyers early and ensuring title searches are ordered at submission.

What Does Private Bridge Financing Cost?

Private bridge loans are priced by loan-to-value and lien position. First-mortgage bridge loans carry lower rates than second-position facilities on the same property. Current rate ranges are published at stonefieldcapital.ca/private-mortgage-rates. Because bridge loans are short-term by design, total interest cost over a 3-to-6-month term is often more manageable than the cost of losing a purchase deposit or missing a closing deadline.

Is There a Minimum Credit Score Requirement?

Stonefield Capital does not enforce a minimum credit score threshold on bridge applications. Equity position and exit strength carry more weight than a bureau score in this product category. A private bridge mortgage is registered on title but is not reported to credit bureaus, so it does not directly alter a score. Borrowers who use the bridge period to retire high-interest debt commonly see credit improvement over the following 1 to 12 months as utilization drops.

What Collateral Does Stonefield Accept for a Bridge Loan?

Stonefield lends across Ontario on residential, rural, and mixed-use properties. Collateral assessed includes the purchase property, the departing property, or both together as a blanket charge when LTV on a single property is high. Short-term rental properties and cottages are underwritten on equity and local comparable sales, not on projected occupancy or nightly-rate income.

How Do Brokers Submit a Bridge Deal?

1. Send the scenario first. Email or call with the purchase price, the departing property value, the closing date, and the exit plan. A same-day read is typical.
2. Receive a term sheet. If the deal fits, a term sheet follows quickly with rate, fee, and conditions.
3. Gather documents. NOA, purchase agreement, listing or sale agreement on the departing property, and ID.
4. Instruct legal counsel. Early lawyer engagement is the single biggest factor in hitting a tight closing date.
5. Fund. Proceeds flow on closing once legal conditions are satisfied.

Broker resources and deal submission details are available at stonefieldcapital.ca/brokers.

What Happens at the End of the Bridge Term?

The bridge loan is repaid from the exit event — typically net sale proceeds or a refinance into conventional financing. Interest accrues only on amounts drawn during the term. If the exit is delayed, most bridge loans can be extended by mutual agreement, subject to updated LTV and exit review. Early repayment is permitted; no penalty applies in most cases.

Stonefield Capital Inc. is a licensed mortgage brokerage in Ontario (FSRA #13722). Products are available to Ontario residents only.

Frequently Asked Questions

Can a private lender bridge a purchase when there is no firm sale on my existing home yet?

Yes. Stonefield Capital can bridge a purchase even when the departing property is listed but not yet sold. Banks typically require a firm sale agreement before advancing bridge funds. Stonefield underwrites on equity and the credibility of the exit plan: an active listing with a realistic timeline is often sufficient to support approval, subject to LTV and overall deal strength.

How long does a private bridge loan last in Ontario?

Stonefield Capital structures bridge loans as short-term private mortgages, with terms typically ranging from 1 to 12 months. The term is matched to the borrower's expected exit — sale closing, refinance approval, or return to conventional financing. Extensions are possible when the exit is delayed, reviewed on updated LTV and exit circumstances at that time.

Do I need an appraisal to get a private bridge loan through Stonefield?

In most cases, no. Stonefield Capital runs its own comparable-sales analysis, which saves the borrower an appraisal fee and several days. When a formal appraisal is required — for example on unusual property types or higher LTV scenarios, that requirement is flagged in the initial deal response, not at commitment or just before closing.

What is the fastest a Stonefield bridge loan can fund in Ontario?

Funding in as little as 48 hours is possible when legal counsel is already engaged and title is clean. The bottleneck in fast closings is almost always legal preparation, not Stonefield's underwriting process. Brokers can shorten timelines by instructing real estate lawyers early and ordering title searches at the point of submission.

How is a private bridge loan different from a HELOC?

A private bridge loan is a fixed-term, interest-only mortgage registered on title, designed to be repaid from a specific exit event such as a property sale or refinance. A HELOC is a revolving credit facility tied to home equity, re-drawable over time. Stonefield's bridge product is not revolving or re-drawable once drawn amounts are repaid; it is a closed, short-term first or second mortgage.