Rate lock
A lender's promise to hold a specific interest rate for a set number of days while the loan is processed. If rates rise before closing, the locked rate stands.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
The buyer's rate lock has an expiration date, and a closing that slips past it can cost the buyer money or their approval. It is one reason buyers resist moving the closing date late.
Part 2 of 4
A simple example
The buyer locked 6.5% for 45 days. Closing slips a week past the lock, and rates have risen to 6.9%.
| What happens | What the buyer faces |
|---|---|
| Closing inside the lock | 6.5%, as promised |
| Closing a week after it expires | An extension fee, or the new rate |
| The new rate pushes their DTI over the line | A loan that no longer approves, and a deal at risk |
A rate lock is a deadline the buyer is carrying. A seller who knows it can plan around it.
Part 3 of 4
What people get wrong
That a delay only inconveniences the buyer. Past the lock it can change the loan, and the loan is what closes your sale.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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