Here’s a call I get almost every week in Winnipeg this time of year: “Ted, we found the house — it’s perfect, and we have to close in three weeks. But our current place doesn’t close until the end of the month. How are we supposed to come up with the down payment when all our money is tied up in the house we’re selling?”

It feels like a trap. Your down payment is sitting right there in the equity of your current home, but you can’t touch it until that sale actually funds — and your new purchase closes first. The good news is that this is one of the most common situations in a busy market, and there’s a simple tool built exactly for it: bridge financing.

What bridge financing actually is

A bridge loan is short-term financing that “bridges” the gap between the day you take possession of your new home and the day your old home’s sale closes and pays out. It lets you use the equity from your current home for your new down payment before that equity is actually in your hands.

It’s secured against your current home, it’s temporary — usually a few days up to about 90 days — and it’s automatically paid off the moment your sale closes. Your lawyer takes the proceeds from the sale, pays off the bridge loan, and forwards you whatever is left. You rarely have to think about it again after closing day.

The one thing you need: a firm sale

Here’s the part that trips people up. For a lender to advance a bridge loan, your current home almost always has to be sold firm — meaning every condition (financing, inspection, sale-of-buyer’s-home) has been removed and there’s a real closing date on the calendar. The bank needs to know, with certainty, that the money is coming to pay the bridge back.

If your home is still listed but not sold, or your buyer’s offer still has conditions attached, most major lenders won’t bridge it. That’s the single biggest thing to get in order early. A conditional offer is not the same as a firm sale, and the difference decides whether bridge financing is on the table at all.

What it costs — a real Winnipeg example

Bridge financing is priced higher than a regular mortgage because it’s short-term and secured against a home that’s on its way out the door. But because you only borrow for a handful of days, the total dollar cost is usually surprisingly small. Two pieces make up the cost:

• Interest — typically prime plus 2% to 4%. With prime sitting around 4.45% in mid-2026, that puts most bridge loans in the ballpark of roughly 6.5% to 8.5%, charged only for the days you actually carry the loan.
• An administration fee — a one-time lender setup charge, usually somewhere between $200 and $500, plus a small legal cost your lawyer adds for handling it.

Let me put real numbers on it. Say you’re a move-up family in south Winnipeg:

• You’ve sold your current home firm for $400,000, closing September 30. You owe $250,000, so after mortgage payout and selling costs you’ll net roughly $135,000.
• You’re buying your next home for $520,000, closing September 15 — two weeks before your sale funds.
• Your new mortgage is $400,000, so you need about $120,000 down on September 15 — money that’s still locked in your old home until the 30th.

You bridge that $120,000 for 15 days. At around 7.5%, the interest works out to roughly $370 (that’s $120,000 × 7.5% ÷ 365 × 15 days). Add a $400 admin fee and a couple hundred dollars in legal, and your all-in cost to make the whole move work is under $1,000. For most families, that’s a bargain compared to the alternative of trying to force both deals to close on the exact same day — or losing the home they wanted.

Why lining up the same closing date is harder than it sounds

People often ask why they can’t just make both homes close on the same day and skip the bridge entirely. You can try — and sometimes it works — but you’re now depending on two separate transactions, two sets of buyers and sellers, two lawyers, and two lenders all funding perfectly on the same afternoon. If your buyer’s financing is even a few hours late, your purchase can’t complete and you risk defaulting on the home you’re buying. Bridge financing removes that pressure and gives you breathing room to move on your own timeline instead of everyone else’s.

A few things to know before you count on it

Lenders will generally want to see enough equity in your current home to comfortably cover the bridge, and a reasonable credit profile — but approval leans far more on that firm sale agreement and your equity than on anything else. Terms longer than about 90 days, or a home that hasn’t sold firm yet, usually push you toward an alternative lender and a higher rate, so it’s worth planning the conversation before you’re writing an offer, not after.

Thinking about a move this fall?

If you’re planning to buy and sell in the same stretch — which, in a market moving as quickly as Winnipeg’s, most move-up buyers are — let’s map out the timing before you’re under pressure. I can tell you exactly what a bridge would cost in your situation, what your lender will need, and how to structure your offers so the whole thing closes smoothly.

Call me at 204-890-2446 or email ted@tedvailas.com, and we’ll make sure the gap between your two closings is the easiest part of your move.

Here’s a moment I see all the time in Winnipeg: a buyer gets the email they’ve been waiting weeks for — “Congratulations, your mortgage is approved” — with a PDF attached. They skim the rate, see the number they expected, and fire back “looks good!” without reading the rest. That PDF is your mortgage commitment letter, and it’s the single most important document in the whole deal. It’s the contract that spells out exactly what you’re agreeing to for the next several years — the conditions, the penalties, the fine print that decides what happens if life changes.

So before you sign anything, slow down. Here’s a line-by-line checklist of what to look for, in the order you’ll usually find it.

1. The basics — make sure they match your deal

Start at the top. Confirm the borrower name(s), the property address, and the mortgage amount are all correct. Then check the numbers that define your loan:

• Interest rate — and whether it’s fixed or variable. If variable, note whether it’s quoted as “prime minus X” so you know how it moves.
• Term — how long the rate and contract are locked (often 3 or 5 years). This is not the same as your amortization.
• Amortization — the total number of years to pay the mortgage off (commonly 25, or up to 30 if you qualify). This drives your payment size.
• Payment amount and frequency — monthly, biweekly, or accelerated biweekly. The frequency changes how fast you pay down principal.
• Maturity date — the day your term ends and you renew. Circle it.

One typo here — a wrong rate, an amortization that’s shorter than you discussed — can cost you real money. Catch it now, not at the lawyer’s office.

2. The rate hold — how long is your rate guaranteed?

Your commitment letter guarantees your rate until a specific date, usually 90 to 120 days from approval. If your closing lands after that window, the rate can change. If you’re buying a new build months out, or your possession date keeps shifting, this line matters a lot. Confirm the hold covers your actual closing date.

3. Conditions to fund — the homework you still owe

Most approvals are conditional, meaning the lender will only release the money once you’ve handed over certain documents. This is where deals quietly fall apart, because buyers assume “approved” means “done.” It doesn’t. Typical conditions include:

• Recent pay stubs, a letter of employment, or T4s / Notices of Assessment
• Proof of your down payment and where it came from (a 90-day history, plus a gift letter if any is gifted)
• A satisfactory property appraisal
• Proof of home insurance effective on closing day
• Sometimes a signed offer, MLS listing, or condo documents

Look for the deadline attached to these conditions. Every one has a date, and missing it can stall or sink your closing. Get them in early.

4. Prepayment privileges — how much extra can you pay?

This is the good news section, and most people never use it because they don’t know it’s there. Your privileges let you pay the mortgage down faster without penalty, usually in two forms:

• Lump-sum privilege — you can put down a percentage of the original balance each year (often 10–20%).
• Payment-increase privilege — you can raise your regular payment by a set percentage (often up to 15–20%).

A mortgage with 20/20 privileges gives you far more flexibility than one with 10/10. If paying your mortgage off early matters to you — and in this rate environment, it should — these numbers are worth comparing before you sign.

5. The penalty clause — the most expensive line in the letter

If you ever break your mortgage before the term ends — to sell, refinance, or move to another lender — you’ll pay a penalty. And this is where the fine print gets expensive, because not every lender calculates it the same way.

For a closed fixed-rate mortgage, the penalty is usually the greater of two figures: three months’ interest, or the Interest Rate Differential (IRD). The IRD compares your current rate against what the lender could charge on a comparable term today. The catch is which rate they compare against:

• A standard IRD uses the lender’s posted rate.
• A discounted IRD subtracts the discount you originally received — and that math almost always produces a bigger penalty.

For a variable-rate mortgage, the penalty is typically just three months’ interest, which is one reason some borrowers prefer them. Two mortgages at the very same rate can carry wildly different break costs depending on this clause alone. If you think there’s any chance you’ll move or refinance mid-term, ask me to walk through the penalty language before you commit.

6. Portability — can you take this mortgage with you?

A portable mortgage lets you carry your existing rate and terms to a new home if you move mid-term — which can save you a penalty entirely. Check whether the mortgage is portable, and how long you have to complete the port (often 30 to 120 days between selling and buying). If you’re the kind of buyer who might upsize in a couple of years, this feature is gold.

7. Fees, and whether the mortgage is “collateral”

Scan for any lender fees, and note how the mortgage is registered. A collateral charge mortgage can make it easier to borrow more later, but harder and sometimes costlier to switch lenders at renewal. It’s not automatically bad — but you should know which one you’re getting and why.

The bottom line

Your commitment letter isn’t paperwork to rush through — it’s the rulebook for one of the biggest financial commitments you’ll ever make. Read the whole thing. The rate is only one number on a page full of numbers that matter. If anything looks off, or you just want a second set of eyes before you sign, that’s exactly what I’m here for.

Send me your commitment letter and I’ll go through it with you line by line — no charge, no pressure. Call 204-890-2446 or email ted@tedvailas.com and let’s make sure you know exactly what you’re signing.

Here’s a call I got last month from a couple buying their first home in the south end of Winnipeg. They’d done everything right — pre-approved, a solid down payment saved, and in a market this tight, they’d offered $12,000 over the asking price to beat two other buyers. Offer accepted. Champagne on ice. Then their lender ordered an appraisal, and it came back $15,000 under what they’d agreed to pay. Suddenly there was a hole in their financing that nobody had planned for, and a very real question: is this deal dead?

It wasn’t. But the way out took a clear head and a fast decision. If you’re buying in Winnipeg in 2026 — where June’s market ran a 70% sales-to-new-listings ratio and buyers are routinely bidding above list — this is a scenario worth understanding before it happens to you.

First, what an appraisal actually is

When you get a mortgage, the lender isn’t just betting on you — they’re betting on the house. An appraisal is an independent, professional estimate of what the property is actually worth, based on recent sales of comparable homes nearby. The lender orders it (you usually pay for it, roughly $300–$500) to make sure they’re not lending more than the home is worth.

Here’s the part that catches people off guard: a lender will lend against the lesser of the purchase price or the appraised value. Not the price you agreed to pay — the lower of the two. So when the appraisal comes in under your offer, the lender quietly shrinks the size of mortgage they’ll give you, and the difference lands on you in cash.

Why appraisals come in low in a hot market

In a seller’s market like ours, appraisal gaps are more common, not less. When multiple buyers push a price above where comparable homes recently sold, the appraiser — who is looking backward at closed sales, not at your bidding war — may simply not find enough evidence to support the number. Other common culprits: a unique or hard-to-compare property, a neighbourhood with few recent sales, a home in rougher shape than the listing photos suggested, or a fast-rising market where last quarter’s comparables haven’t caught up.

None of it means you overpaid, necessarily. It means the appraiser couldn’t prove the value on paper. But your lender treats that number as gospel.

The math: how the gap actually hits you

Let’s use real Winnipeg numbers. Say you agreed to buy at $415,000 — a touch above this June’s average sale price of $401,200 — with 20% down.

• Your plan: $83,000 down (20%), $332,000 mortgage.
• The appraisal comes in at $400,000 — a $15,000 gap.
• The lender now bases your mortgage on $400,000, not $415,000. At 80% financing, that’s a $320,000 mortgage — $12,000 less than you needed.
• You still owe the seller $415,000. So you have to cover that $12,000 shortfall plus your original down payment — out of pocket, in cash, before closing.

That’s the trap. A low appraisal doesn’t lower your purchase price. It just shifts more of the cost from the bank onto you. And on an insured (less-than-20%-down) purchase, the math is even tighter, because your minimum down payment is calculated on that lower value too.

Your three real options

1. Top up your down payment. If you have the cash — or a family member willing to gift it — you can simply cover the gap yourself. It’s the cleanest fix, but only if the money’s genuinely available without draining the reserves you’ll want after closing.

2. Challenge the appraisal — or get a second one. If you believe the number is genuinely wrong, we can ask for a reconsideration of value, especially if the appraiser missed relevant recent sales or got the home’s details wrong. This is where a broker earns their keep: I know which lenders will entertain a second appraisal and which won’t touch it, and I can move to a different lender whose appraiser may see the value your first one didn’t.

3. Walk away — if you protected yourself upfront. If your offer still has a financing condition in place, a low appraisal that kills your financing can let you exit the deal without penalty and get your deposit back. This is exactly why I push so hard against waiving your financing condition, even in a competitive market. That one clause is the difference between renegotiating from a position of strength and being trapped in a deal you can’t fund.

How to protect yourself before you ever see an appraisal

The best time to deal with a low appraisal is before it happens. Keep a financing condition in your offer whenever you reasonably can. Don’t stretch your bid so far above the comparables that no appraiser could support it. Keep a cash cushion beyond your down payment so a modest gap doesn’t blow up your closing. And get properly pre-approved — not just pre-qualified — so you know your true numbers going in.

Most of all, get a broker in your corner early. When that appraisal came back low for my first-time buyers, we had the seller on the phone within the hour and closed the gap by day’s end. A low appraisal is a problem you solve — not a deal you lose — when you know your options and move fast.

Worried about an appraisal gap on a home you’re bidding on — or already have one on your hands? Let’s talk through your options before the clock runs out. Reach Ted Vailas, your Winnipeg mortgage broker, at 204-890-2446 or ted@tedvailas.com.