Definition
A lender's guarantee that a specific interest rate will be held for a set period, protecting the borrower from rate increases during the loan processing period. Standard rate locks are 30-60 days and are typically free. Extended locks (75-120 days) may carry a small fee. If rates drop during the lock period, some lenders offer float-down options that allow you to take advantage of the lower rate for a fee.
Related Mortgage Terms
- Closing Costs
Fees and expenses paid at the finalization of a real estate transaction, typical...
- Interest Rate
The cost of borrowing money, expressed as a percentage of the loan amount charge...
- Loan Estimate
A standardized three-page document that lenders must provide within three busine...
- Amortization
The process of paying off a mortgage through regular monthly payments of princip...
- Annual Percentage Rate (APR)
The total annual cost of a mortgage expressed as a percentage, including the int...
Understanding mortgage terminology helps you compare loan offers and make informed decisions. Use our mortgage calculator to see how these terms affect your monthly payment.