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

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What is a Rate Lock?

A rate "lock" or "commitment" is a promise from the lender to set a specific interest rate and a specific number of points for you for a specified period during your application process. This means your interest rate won't rise during the application process.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer spans generally costing more. The lending institution can agree to freeze an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Other Ways to Save on Interest

In addition to choosing the shorter rate lock period, there are more ways you are able to score the lowest rate. A bigger down payment will result in a lower interest rate, because you are starting out with a good deal of equity. You could choose to pay points to improve your interest rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the term of the loan. You will pay more initially, but you'll come out ahead, especially if you keep the loan for a long time.

Integrated Financial Solutions, LLC can answer questions about rate lock periods and many others. Call us: 410.461.4043.