Loans
Rate Lock
A guarantee from your lender that your mortgage interest rate will not change for a specified period, typically 30 to 60 days, while your loan is processed. Rate locks protect you from market fluctuations. Longer locks may cost slightly more. If your loan does not close before the lock expires, you may need to pay to extend it or accept the current market rate. Lock your rate when you find a rate you are comfortable with.
Why It Matters
Understanding Rate Lock is a key part of choosing the right mortgage. The type of loan you select affects your monthly payment, how much interest you pay over the life of the loan, and how much flexibility you have if your financial situation changes.
When comparing loan options, pay attention to how rate lock fits into the bigger picture of your borrowing costs. A knowledgeable loan officer or mortgage broker can help you evaluate whether this option aligns with your financial goals and timeline.