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

Lock It In

A rate "lock" or "commitment" is a promise from the lender to freeze a certain interest rate and a certain number of points for you for a specified period of time during your application process. This means your interest rate cannot rise while you are working through the application process.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period typically costing more. A lending institution will agree to hold an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

Additional Ways to Save on Interest

There are other ways to get a good rate, besides choosing a shorter rate lock period. The bigger the down payment, the better the interest rate will be, as you will be starting with more equity. You could choose to pay points to bring down your rate for the loan term, meaning you pay more initially. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You'll pay more up front, but you will come out ahead, especially if you don't refinance early.