Calgary Decision Library
Bridge Loan vs HELOC — Calgary Upsizing Financing
The honest comparison
Both tools solve the same problem — accessing home equity to fund a new purchase before the existing home closes — but they work very differently. The right choice depends on whether your existing home is already under firm contract.
Bridge loans are short-term advances (30–120 days typical) provided by your mortgage lender. They require your existing home to be under firm contract for sale (all conditions removed). The lender uses that contract as security and advances up to the difference between your new-home down payment and your existing home's expected net proceeds. Costs run prime + 2% to prime + 4% annualized, plus a $250–$500 setup fee. For a 60-day bridge of $300,000 at prime + 3%, expect $4,000–$6,000 in interest.
HELOCs are revolving credit lines secured against home equity. They are typically set up well before any sale and provide flexible access to up to 65% of home value (subject to lender rules and total LTV caps). They can be used for any purpose including a new-home down payment. Rates are usually prime to prime + 1% — cheaper than bridge — but the line must be in place before the move.
The KARAKTER recommendation: if you are still 30–90 days from listing, set up a HELOC now. If you are already under firm contract on your existing home, a bridge loan is faster and simpler. Some clients use both — HELOC for early flexibility, bridge to close the gap.
Side by side
| Factor | Bridge loan | HELOC |
|---|---|---|
| Term | 30–120 days | Revolving / open |
| Requires firm sale contract | Yes | No |
| Typical rate | Prime + 2% to prime + 4% | Prime to prime + 1% |
| Setup time | Fast (days, with sale contract) | Slow (weeks, full underwriting) |
| Setup fee | $250–$500 | Often nil with major bank |
| Best fit | Already under firm sale | Pre-listing flexibility |
Frequently asked questions
Can I use a HELOC instead of a bridge loan?
What is bridge loan interest cost on a typical Calgary upsize?
Does KARAKTER coordinate with my mortgage broker?
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