What is a Deposit Financing loan?

A Deposit Financing loan is short-term bridge financing designed to help you cover a real estate deposit or other time-sensitive closing costs while you complete a sale, refinance, or other planned payout.

What is the term of the loan?

Our loans have a maximum term of up to 4 months from the date funds are advanced (the “maturity date”). The 4‑month term is an outside maturity date—you can repay earlier at any time, and interest is calculated only for the actual time the loan is outstanding. We do not charge a prepayment penalty or “minimum interest” amount solely because the loan is repaid early.

Can I repay the loan early?

Yes. The loan is prepayable at any time without penalty. If you repay early, you pay the outstanding principal plus interest accrued up to the date of repayment (and any agreed amounts set out in your loan documents).

Are there any initial or extra costs?

There are no initial costs, extra costs, or monthly payments. The loan amount plus the processing fee and accrued interest are repaid in a lump sum by your Lawyer or Notary upon the completion of your sale.

How is interest calculated?

Interest accrues daily on the outstanding principal at the interest rate set out in your loan documents and is payable at payout (or at maturity if the loan runs to the full term). Because interest accrues based on time outstanding, the cost of borrowing does not increase simply because the loan is repaid sooner than the maximum term.

When and how is the loan paid out (from sale proceeds)?

If your loan is being repaid from the sale of your property, your lawyer or notary (the “closing professional”) will typically pay Deposit Financing Inc. directly from the sale proceeds on completion. You sign a Direction to Pay authorizing that payment, and your closing professional generally provides an escrow/holdback undertaking confirming they will (i) hold back sufficient funds from the sale proceeds to repay the loan in full (principal plus accrued interest to the completion date), and (ii) remit those funds to Deposit Financing Inc. as part of the completion process. If the sale completes and the loan is not being paid out in full, then replacement security must be provided on or before completion (so the security continues until the loan is repaid or the 4‑month maturity date, whichever is sooner).

What security does Deposit Financing Inc. take?

Security is tailored to the transaction, but commonly includes:

• an equitable (unregistered) mortgage/charge on the property being sold or refinanced (the “Original Property”); and

• a signed Direction to Pay confirming your closing professional will pay the loan directly from completion proceeds.

Depending on the file, additional supporting security or undertakings may be required.

What is an “equitable charge” and why is it used?

An equitable charge (often an executed but unregistered mortgage) is a form of real estate security used in short-term bridge transactions. It can provide security while supporting a smooth closing process where the Original Property is being sold or refinanced.

What is a “Direction to Pay”?

A Direction to Pay is an authorization you sign instructing your lawyer/notary (closing professional) to pay the amount required to repay the loan (plus accrued interest) directly to Deposit Financing Inc. from sale or refinance proceeds.

What does “escrow” mean in this context?

“Escrow” means your closing professional agrees (by written undertaking) to:

• hold back sufficient funds from completion proceeds to repay the loan on completion; and

• pay Deposit Financing Inc. directly as part of the closing process.

What happens if the property used as security is sold or transferred before the loan is repaid?

If the Original Property is sold or transferred before the loan is repaid, then one of two things must happen on or before completion:

1. the loan is paid out in full from completion proceeds; or

2. the security is replaced with other acceptable security (“Replacement Security”) that remains in place until the loan is repaid in full or the 4‑month maturity date occurs (whichever is sooner).

What counts as “Replacement Security”?

Replacement Security may include, depending on the transaction:

• a mortgage/charge on a replacement property (for example, the new purchase); and/or

• other security acceptable to Deposit Financing Inc., supported by appropriate legal documents and undertakings.

What if my sale or refinance is delayed?

If payout is delayed, the loan continues until it is repaid or until the maturity date, subject to the loan documents. If the Original Property is sold or transferred and the loan is not paid out on completion, replacement security will be required.

What if my sale doesn’t complete?

The loan remains payable under its terms. If your planned payout does not occur, we will work with you to confirm next steps, which may include updated security or other arrangements as set out in your loan documents.

Is this loan a mortgage?

Your loan may be secured against real property and may be treated as a mortgage transaction for certain legal and regulatory purposes. Your documents will clearly describe what security applies and how it may be enforced if there is a default.

What do I need to provide to get started?

Typically:

• signed loan documents;

• sale details and expected completion date(s);

• your lawyer/notary contact information; and

• any required security documents and undertakings.

Do I have to sign the documents with my Lawyer or Notary?

We issue our documents electronically for you to sign on your own. Once you have signed these documents, we forward them to your Lawyer or Notary for execution. 

From inquiry to funding, our process is fully digital. 

Do I have to use a specific Lawyer or Notary?

Although some organizations require you to work with their Lawyer/Notary or one who is outlined on their approved list, we do not. Our only requirement is that the legal representative is licensed and practicing in the province that your sale is taking place.

*Since we work with the Lawyer or Notary of your choosing, it is important they have been contacted, arranged, and have been provided with the necessary documentation pertaining to your sale. They will not sign our documents until this has been done.

How long does this process typically take?

Provided you have a firm sale on your current home and have a Lawyer or Notary retained and instructed to handle your sale, we can fund in as little as 24 hours.

When do I receive the funds in my account?

All funding’s are transferred electronically, which are processed and cleared in batches throughout the day. Please refer to the chart below for when the funds will be available to you.

Funding times

How much does this service cost?

For a quote, please try our Cost Calculator using the button below. The only information you need to receive a quote is the amount and length of time required.

*Our loans are set up for a minimum term of 4 months. All loans have completely open terms, meaning they can be repaid at any time without penalty or additional interest.