Rate Lock
A lender's commitment to honor a specified interest rate for a defined period, regardless of market movement.
Once your loan is in process, you can lock the rate to insulate yourself from market volatility. Common lock periods are 30, 45, or 60 days; longer locks are available for purchases with extended closing timelines but typically cost more in points or rate adjustment.
If rates move against you during your lock window, you're protected. If rates drop substantially, most lenders offer a one-time float-down option for a fee, letting you capture some of the improvement without restarting the underwriting clock.
Letting a lock expire is expensive, you'd be re-pricing at current market levels, which may be higher. If closing is going to delay past the lock expiration, ask about a lock extension early; extension fees are usually cheaper than re-locking at worse market levels.
Related terms
Other terms you'll see alongside Rate Lock
The percentage of the loan balance the lender charges as the cost of borrowing, paid annually but accrued daily.
Prepaid interest paid at closing to permanently lower the loan's interest rate.
The standardized three-page disclosure a lender must provide within three business days of a complete loan application.
The five-page final-numbers document a lender must deliver to the borrower at least three business days before closing.
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