What is a Rate Lock?
A Rate Lock allows you to “lock in” the fixed interest rate on your home loan at the time of application, even if interest rates rise before your loan settles. It provides peace of mind during the settlement process.
How Much Does It Cost?
Rate lock fees vary by lender, but they are generally either:
- A flat fee (typically between $395–$750), or
- A percentage of the loan amount (commonly 0.15%–0.25%).
Example: For a $700,000 loan, a 0.15% fee would equal $1,050.
Note: This fee is usually non-refundable, even if the loan doesn’t proceed.
What Happens After the Rate Lock Period Ends?
The rate lock generally lasts for 60 to 90 days (depending on the lender). If your loan doesn’t settle within that window:
- You may revert to the current fixed rate at settlement; or
- The rate lock may need to be re-applied (with another fee), if allowed.
