The client
A family bought firm on a $840,000 home in Barrie, timed against the sale of their existing home. Three weeks before their own closing, the buyer on their existing home lost financing and the deal collapsed — leaving a firm purchase with an immovable closing date, a deposit at risk, and no sale to bridge against.
New purchase
$840,000, Barrie
Firm and unconditional; closing date fixed
Existing home
Listed at $760,000
Sale collapsed 3 weeks before the new closing
Household income
$154,000 / year
Two incomes, both stable
Equity position
Strong across both properties
The problem was timing, not equity
Private blanket
$620,000 across both titles
Interest-only, 10.9% (illustrative, not a quote)
Lender/broker fee
2% of principal (illustrative)
$12,400 — negotiated per file, not published
The problem
A bank bridge loan is conditional on a firm, unconditional sale agreement for the property being bridged — that condition is set by lender policy, and it varies from one bank to the next, but every one of them needs a real sale in hand. Once the buyer's financing collapsed, the sale agreement was gone, and with it went the bank bridge option entirely. No amount of equity in either property changes that: the bank isn't underwriting the equity, it's underwriting the sale. The gap here had nothing to do with the mortgage arrears rate in Canada either — the family never missed a payment on either property; the sale simply fell through.
The new purchase's closing date, meanwhile, was not moving. A firm deal closes on the date in the agreement, deposit and all, regardless of what happens to the seller's own move. The family was three weeks from being firm on a home they couldn't otherwise fund, with an old home that now had to be re-listed and sold from scratch.
The numbers
With no bank bridge available, the only structure that could close on the fixed date was a private first mortgage — a blanket (inter alia) mortgage registered across both properties, sized to retire the small remaining balance on the old home and fund the new purchase in full.
| Sizing the private blanket | Amount |
|---|---|
| Private blanket principal (both titles) | $620,000 |
| Rate — interest-only (illustrative, not a quote) | 10.9% |
| Monthly interest-only payment | $5,632 |
| Lender/broker fee — 2% (illustrative) | $12,400 |
Pricing the worst case
| If the resale took the full listing period (6 months) | Figure |
|---|---|
| Interest-only carry — 6 × $5,632 | $33,792 |
| Plus the 2% lender fee | $12,400 |
| Total worst-case cost of the private rescue | $46,192 |
That worst case is what the family budgeted against before deciding to proceed — the actual cost, shown in the outcome section, came in well under it because the resale moved faster than the plan assumed.
The backup plan
As a second exit besides the resale itself, the broker also priced what a refinance of the surviving balance would look like if the home hadn't sold within six months: at an illustrative 5.14% contract rate, the file would need to qualify at the minimum qualifying rate of 7.14% — the greater of contract + 2% or 5.25%. Confirming the household's income supported that stress-tested rate meant the family had a funded fallback even if the market stalled.
Land transfer tax on the new purchase
The private structure changes how the purchase is financed, not what's owed to the province. Ontario's Barrie market purchase at $840,000 carries the same marginal land transfer tax regardless of lender type.
| Ontario land transfer tax on $840,000 | Bracket |
|---|---|
| 0.5% up to $55,000 + 1.0% to $250,000 + 1.5% to $400,000 + 2.0% above $400,000 | $13,275 total |
The solution
An FSRA-licensed Ontario mortgage agent structured the rescue in three moves, each aimed at buying time without betting the family's equity on an open-ended timeline.
First, closed the purchase on the fixed date. A private first mortgage registered as a blanket charge across both the new home and the existing one gave the lender security over the combined equity, which is what made a structure this size fundable on short notice.
Second, built a disciplined exit. The existing home was re-listed at a corrected market price rather than the original ask, with a clear target of selling inside six months — the window the interest-only carrying cost was priced against.
Third, pre-arranged a second exit. The backup refinance, stress-tested at the qualifying rate before it was ever needed, meant the family wasn't relying on the resale alone to get out of the private mortgage.
The outcome & the rescue's true cost
The existing home sold in month four — two months ahead of the six-month worst case the private mortgage was priced against — and the private blanket was discharged from both titles at closing.
| What the rescue actually cost | Amount |
|---|---|
| Interest-only carry — 4 months × $5,632 | $22,528 |
| Lender/broker fee (2%, illustrative) | $12,400 |
| Total realized cost of the private rescue | $34,928 |
Selling two months early saved roughly a third of the worst-case interest carry ($33,792 versus $22,528) — the backup refinance was never needed, but pricing it up front is what let the family commit to the private structure with a known floor under the risk.
What to take from this file
- 01A bank bridge lives or dies with the sale agreement, not the borrower's equity. Once financing on the buyer's side collapses, the bridge is gone regardless of how much equity sits in either property.
- 02Price the exit before you price the bridge. This rescue worked because the resale had a realistic worst case (six months) and a tested backup (a refinance stress-tested at the qualifying rate) before the private mortgage ever closed.
- 03Private-lending rates and fees are negotiated per file, not published. The 10.9% rate and 2% fee here are illustrative — confirm current pricing with the lender before quoting a client.
- 04A faster resale is real money back. Closing two months ahead of the worst case cut this file's interest carry by roughly a third.
- 05Land transfer tax is owed on the purchase regardless of how it's financed. Budget it alongside the bridge or private cost, not as a separate afterthought at the closing table.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸Ontario.ca — Calculating Land Transfer Tax / Land Transfer Tax Refunds for First-Time Homebuyers — Ontario's marginal land transfer tax brackets and first-time-buyer refund.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
Illustrative in this file — lender-specific, not rules:
- ▸10.9% private rate and 2% fee — private pricing is negotiated per file.
- ▸bank bridge requires a firm sale — bridge policy varies by lender.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.