What is a Mortgage Rate lock? – Newshuntz.com


  • A mortgage rate lock allows you to lock in an interest rate for a set period, usually up to 120 days (unless you work with huntz for your renewal or new purchase, you may benefit from a lock-in period). blocking of 150 days!)
  • Locking in your mortgage rate protects you if interest rates rise.
  • With some lenders in Canada, a mortgage rate lock means you will have to meet your rate lock if interest rates drop during your rate lock period.

Table of Contents

What is a mortgage rate lock?

A mortgage rate lock allows you to secure an interest rate for a specific period when refinancing or applying for a mortgage loan. Mortgage rate locks allow prospective homeowners to get the best mortgage rate available, should interest rates rise. At huntz, we can lock in a rate for up to 150 days.

However, if interest rates drop while you’re locked into a mortgage rate, you won’t be able to get a lower rate from the same lender unless you have a floater option. A floater allows you to take advantage of a better rate if interest rates drop during your rate lock-in period.

Why do mortgage rates change?

Some factors affect mortgage rates, including government fiscal policy and market forces. Some of the main influences on mortgage rates include:

  • Fiscal policy and the key rate. The government sets its policy rate, otherwise known as the overnight target rate, 8 times a year. This is the rate at which the Bank of Canada lends money to big banks, which in turn affects their mortgage rates for consumers.
  • Bond yields. 5-year fixed-rate mortgages are one of the most popular mortgage options available. In general, these products follow the trend of 5-year government bonds, with an additional spread of 1-2% on top of the policy rate.
  • Market demand. When demand for homes increases, demand for mortgages follows and interest rates generally increase. Conversely, if demand for mortgages declines, interest rates typically follow to provide an incentive to borrow.


How much does it cost to lock in a mortgage rate?

Nothing. However, choosing not to lock in your rate could cost you thousands of dollars, if you end up paying a higher interest rate elsewhere.

What happens if I lock in a rate and it drops?

When you lock in your rate with huntz and rates drop, you will have the opportunity to get the lowest rate. Choosing to lock in your rate with huntz is designed to protect you from rate increases, not to punish you if rates drop.

Does a rate lock mean you are approved?

No. Rate locking simply holds a rate that you will still need to be approved for, for a set time. We must complete your approval process, including loan underwriting and ensuring you meet the terms of your mortgage before it is finally approved.


Ultimately, locking in your mortgage rate is a good way to get the lowest possible rate for the home you want to purchase. At huntz, we can help you lock in a rate for up to 150 days, and you’ll also be covered if rates drop.

A rate lock does not guarantee that you will be approved for a loan, as you will still need to meet all mortgage approval guidelines such as your income, credit, debt-to-income ratios, etc. However, a rate lock is the best way to get the lowest possible rate if you want to get approved for a mortgage.

With interest rates expected to continue to rise in Canada and home prices beginning to fall, now is the best time to contact us and discuss locking in your mortgage rate.

Read also: How Much Will a $200000 Mortgage Cost You?

Leave a Comment