What is a "rate lock period"?

Freezing the Rate

A rate "lock" or "commitment" is a lender's promise to hold a specific interest rate and a particular number of points for you for a specified period during your application process. This protects you from going through your entire application process and discovering at the end that your interest rate has gotten higher.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer spans typically costing more. You can get a longer period for your lock, but in doing so, will likely have a higher rate than you would with a shorter rate lock period

Other Ways to Save on Interest

There are more ways to get a reduced rate, besides choosing a shorter rate lock period. The bigger down payment you pay, the smaller your interest rate will be, because you will have more equity from the beginning. You can pay points to lower your interest rate over the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to reduce the rate over the term of the loan. You are paying more up front, but you will save money in the long run.

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