Getting a Low Interest Rate

Freezing the Rate

When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a particular interest rate for a determined period while you work on your application process. This means your interest rate will not rise as you are working through the application process.

While there are various lengths of rate lock periods (from 15 to 60 days), the extended spans (from 60 to 120 days) are typically more expensive. A lender may agree to lock in an interest rate and points for a longer period, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.

More Ways to Save on Interest

There are other ways to get a lower rate, in addition to going with a shorter rate lock period.  A larger down payment will give you a better interest rate, because you are starting out with more equity.  You can pay points to bring down your rate over the term of the loan, meaning you pay more initially.  But to many people, this does not makes financial sense.