"Rate Lock" and other Ways to Get a Lower Interest Rate

Locking in your Interest Rate

When you are offered a "rate lock" from the lender, it means that you are guaranteed to keep a certain interest rate for a determined period while you work on your application process. This ensures that your interest rate cannot grow while you are going through the application process.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer ones generally costing more. A lending institution can agree to freeze an interest rate and points for a longer period, such as 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.

Other Interest Saving Strategies

In addition to opting for a shorter lock period, there are more ways you can get the lowest rate. A larger down payment will get you a better interest rate, because you're starting out with a good deal of equity. You can pay points to lower your rate for the life of the loan, meaning you pay more initially. For many people, this is a good option.