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

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Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to lock in a specific interest rate and a particular number of points for you for a certain period while your application is processed. This means your interest rate can't grow while you are going through the application process.

Although there can be a choice of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. The lending institution will agree to freeze 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 that of a rate lock of fewer days.

More Ways to Get a Great Interest Rate

There are other ways to get a low rate, besides agreeing to a shorter rate lock period. The more the down payment, the lower the rate will be, since you will be entering the loan with more equity. You may choose to pay points to reduce your interest rate over 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 initially, but you will come out ahead, especially if you don't refinance early.