For Interferometry Synthetic Aperture Radar (InSAR), the normal baseline is one of the main factors that affects the accuracy of the ground elevation. For Gaofen-3 (GF-3) InSAR processing, the poor accuracy of the real-time orbit determination results in a large baseline error, leads to a modulation error in azimuth and a slope error in the range for timely Digital Elevation Model (DEM) generation. In order to address this problem, a novel baseline estimation approach based on Shuttle Radar Topography Mission (SRTM) DEM is proposed in this paper. Firstly, the orbit fitting is executed to remove the non-linear error factor, which is different from traditional methods. Secondly, the height errors are obtained in a slant-range plane between SRTM DEM and the GF-3 generated DEM, which can be used to estimate the baseline error with a linear variation. Then, the real-time orbit can be calibrated by the baseline error. Finally, the DEM generation is performed by using the modified baseline and orbit. This approach has the merit of spatial and precise orbital free ability. Based on the results of GF-3 interferometric SAR data for Hebei, the effectiveness of the proposed algorithm is verified and the accuracy of GF-3 real-time DEM products can be improved extensively.