Mortgage Rate Holds: How to Lock In Your Rate

House hunting while worried about rates rising before you find a home? Rate holds are your protection, locking in today's rate while you search. Here's how to use them effectively and strategically.

What Is a Mortgage Rate Hold?

A rate hold (or rate lock) is a lender's commitment to honor a specific interest rate for a set period, typically 90-120 days. During this time:

• If rates go up, you keep the lower held rate
• If rates go down, most lenders give you the lower rate
• You're protected while house hunting

How Long Can You Hold a Rate?

Standard hold periods:

• 90 days: Common for conventional mortgages
• 120 days: Many brokers can access extended holds
• 180 days: Available in some cases for new construction

The clock starts when you get your pre-approval.

Rate Hold vs Pre-Approval

They're related but different:

Pre-approval = Lender verifies your income, credit, and down payment

Rate hold = Lender locks a specific rate for you

You typically get both together, but some pre-approvals don't include rate holds.

Strategic Use of Rate Holds

Layer your holds:

Get pre-approved with multiple lenders at different times. If your first hold expires, you have backup holds still active.

Time your pre-approval:

If rates seem to be rising, get pre-approved immediately to lock in current rates. If rates are falling, you might wait—but you're taking a risk.

What Happens When Your Hold Expires?

Options include:

1. Extend (if available): Some lenders extend holds once
2. Re-apply: Get a new pre-approval at current rates
3. Switch lenders: Get a fresh hold elsewhere

Do Rate Holds Cost Anything?

Legitimate rate holds from banks and lenders are free. Be cautious of anyone charging for rate holds—this is not standard practice.

The "Rate Drop" Feature

Most major lenders offer this: if rates decrease during your hold period, they'll give you the lower rate. This means you get the best of both worlds:

• Protection if rates rise
• Benefit if rates fall

Always confirm this feature with your lender.

Rate Holds for Different Mortgage Types

Fixed rates: Standard 90-120 day holds widely available

Variable rates: Usually set at time of funding, not held in advance

Pre-construction: Extended holds (often 1+ year) through builder programs

Common Mistakes to Avoid

1. Letting holds expire without backup
Always know when your hold expires and plan accordingly.

2. Not getting holds in writing
Verbal promises don't count—get your rate commitment documented.

3. Making credit changes during hold
Major purchases or new credit can void your pre-approval and rate hold.

4. Assuming all lenders match
Not all rate drop policies are equal—compare terms.

FAQ

Q: Can I hold rates at multiple lenders?
A: Yes, this is a smart strategy. It costs nothing and gives you options.

Q: What if I don't buy within the hold period?
A: Nothing happens—you just need a new pre-approval. There's no penalty.

Q: Do rate holds affect my credit score?
A: The initial pre-approval creates a credit inquiry. Multiple inquiries within 14 days count as one.

Q: Can I change the rate type after holding (fixed to variable)?
A: Yes, most lenders allow this. The hold is typically for their best rate in your chosen category.

Q: Are online rate holds different from broker rate holds?
A: Brokers often access better rates than what's advertised online. Work with a professional for the best holds.

What's Next

Rate holds are just one part of smart home buying. Make sure you also understand the stress test requirements and budgeting for closing costs. Start your pre-approval today.