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

What is a Rate Lock?

A rate "lock" or "commitment" is a promise from the lender to set a particular interest rate and a specific number of points for you for a certain period during your application process. This means your interest rate cannot go up while you are going through the application process.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer spans generally costing more. You can get a longer period for your lock, but in choosing this option, will most likely have a higher interest rate than you would with a shorter rate lock span of time

Other Interest Saving Strategies

There are other ways to get a reduced rate, besides opting for a shorter rate lock period. The bigger the down payment, the smaller the interest rate will be, since you will have more equity from the start. You can pay points to improve your interest rate for the loan term, meaning you pay more up front. One strategy that is a good option for many people is to pay points to bring the rate down over the life of the loan. You will pay more up front, but you'll save money, especially if you don't refinance early.

At Savers Home Loans, we answer questions about this process every day. Call us: (800) 974-0509.