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[MoreMore Insights] Rate Lock

What is Rate Lock?

Rate lock, is a service provided by the bank to lock the fixed rate for 60 to 90 days during a mortgage application process. This is to keep your fixed rate from rising between the time you apply for a loan and the time the loan settles.

Fixed interest rate may change during a loan application. And the fixed interest rate you are going to get, is bank’s advertised fixed rate on the day that the loan settles. In other words, the fixed rate showing on your loan application form or on your loan contract is indicative only, and is not necessarily the final rate that you are going to get on settlement day.

So the rate lock service, will enable you to get the low fixed rate before the rate rise.

When Should You Lock a Mortgage Rate?

Trying to predict home loan interest rate is kind of like forecasting the stock market, and the rates could be up one day and down the next. But if the market is expecting an increase in the interest rate, then you should try to get the best fixed rate you can earn and lock it in asap.

Especially if you’re approved for a home loan at a fixed rate that you’re comfortable with, it might be the time to consider locking your rate.

How to Lock in a Fixed Rate?

Your mortgage lender may accept your rate lock request after your loan application is submitted and before it settles, though rate lock policies vary by lenders.

Rate lock fees vary according to the loan amount and term of the loan, and are measured in basis points. There are some lenders in the market that are waiving the rate lock fees too.

Want to take advantage of rate lock service? Contact your mortgage brokers to get the best deal for yourself.

Want to contact us today?

Please call 1300 613 813 for a free-cost consultation.

Or, simply fill the form [enquire now], we will go back to you in 24-hour.

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