# How do lenders assess my ability to repay a bridge loan?

> Lenders primarily evaluate your demonstrated ability and willingness to service your debt obligations, consistent with OSFI's Guideline B-20.

Category: Strategy
Last verified: 2026-04-14
Source: https://ratellow.com/faqs/strategy/how-do-lenders-assess-my-ability-to-repay-a-bridge-loan

## Answer
For a $500,000 mortgage, even slight interest rate increases can significantly impact your GDS/TDS. Bridge financing approval hinges on demonstrating you can comfortably handle your existing mortgage, the new mortgage, *and* the bridge loan during the interim period. Here's how interest rate changes could impact your ratios:

| Interest Rate | Example GDS | Example TDS |
|---|---|---|
| 5% | (example GDS below 39%) | (example TDS below 44%) |
| 5.5% | (example GDS below 39%) | (example TDS below 44%) |
| 6.25% | (example GDS at or near 39%) | (example TDS at or near 44%) |

## Institutional highlights
- Lenders will check your credit history to see how you've managed debt in the past.
- Lenders will look at your GDS and TDS ratios, using a higher interest rate to make sure you can afford the loan.
- You'll need to provide proof of income and employment to show you can repay the bridge loan.
- Lenders will check if you can still afford your mortgages if interest rates rise.
- Lenders must follow careful lending practices to make sure you can manage your mortgage payments.

## Related guide
- https://ratellow.com/guides/bridge-financing-explained

## Sources
- I. Purpose and scope of the guideline — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#1.0
- Footnotes — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-guideline-2026
- Page 3 — https://assets.cmhc-schl.gc.ca/sf/project/cmhc/pdfs/factsheets/new/cmhc-quick-reference.pdf#page=3