An agreement between the borrower and lender that guarantees a specific interest rate for a defined period, typically 30–60 days.
Full Definition
A rate lock protects the borrower from interest rate increases during the loan processing period. Once locked, the agreed rate is guaranteed regardless of market movement — if rates rise, the borrower keeps the lower locked rate; if rates fall, the borrower is usually stuck at the locked rate (unless a float-down option was purchased). Lock periods typically range from 15 to 60 days, with longer locks costing more. If the loan doesn't close before the lock expires, the borrower may need to extend (at a cost) or accept prevailing market rates. Locks are usually offered at the point of loan application or when the property goes under contract.
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