Joel DyckReal Broker SK Ltd.
Saskatoon · From the topic map

How does a bridge loan or rent-back work?

A bridge loan and a rent-back solve the same timing problem from opposite directions. A bridge loan is short-term financing, arranged through a bank or mortgage lender, that covers the deposit on your next home before the proceeds from your current sale arrive. A rent-back lets you stay in the home you just sold as a paying tenant instead.

The bridge loan route needs a firm sale in hand and a lawyer regulated by the Law Society of Saskatchewan administering funds through a trust account at both closings. Lenders generally require a signed, condition-free contract on your existing home before approving one, and it is repaid in full on that sale's closing day, often within days of your new purchase closing, on top of legal fees typically $800 to $1,500 for the purchase and sale themselves.

The rent-back route needs the buyer's cooperation instead of a lender's approval. Daily rent, length of stay and the condition of the home at handover are negotiated as part of the purchase agreement itself and confirmed in writing by the lawyers on both sides.

Which one fits depends on whether your own next home or your buyer's flexibility is the tighter constraint. Get your hand-reviewed valuation from Joel Dyck.

Get your hand-reviewed valuation from Joel Dyck.

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