rate lock

Definition

An agreement that freezes your mortgage interest rate for a specified period while you complete the purchase. It's financial stability in an unstable world, for 30-60 days at least.

Example Usage

We got our rate lock at 6.5% right before rates jumped to 7%—finally, good timing on something.

Origin

Mortgage industry practice developed during 1980s interest rate volatility

Fun Fact

Float-down options let you lock a rate but take a lower one if rates drop—for an extra fee, because nothing is ever truly free.

Source: Mortgage rate terminology

Related Terms

Intermediate

DTI ratio

Debt-to-Income ratio—the calculation that determines if you're financially responsible enough to borrow money, by comparing your debts to your income. It's how lenders mathematically judge your life choices.

🏠 Real Estate

Beginner

amortization schedule

A detailed table showing how each mortgage payment is split between principal and interest over the loan's lifetime. It's essentially a financial crystal ball revealing that your first payments are basically just interest donations to your lender.

🏠 Real Estate

Beginner

auction

A socially acceptable form of gladiatorial combat where participants wave paddles and bankrupt themselves in public, all for the thrill of outbidding strangers. The highest bidder wins the dubious honor of paying more than everyone else thought something was worth. Popular in real estate, art, and estate sales where dead people's stuff finds new homes.

🏠 Real Estate

Advanced

usable square footage

The actual floor space a tenant can occupy, excluding common areas like lobbies and hallways. In commercial leases, this differs from rentable square footage through a multiplier that ensures you pay for space you can't actually use.

🏠 Real Estate

Intermediate

blanket mortgage

A single loan that covers multiple properties, popular with developers and investors who find getting individual mortgages tedious. It's the financial equivalent of buying in bulk, often with a release clause letting you sell properties individually.

🏠 Real Estate

Advanced

per stirpes

A method of property distribution in estate planning where a deceased heir's share passes to their descendants rather than being redistributed. Latin for 'please don't fight over my stuff when I'm dead.'

🏠 Real Estate

Translate This Term

See “rate lock” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

Try the Translator

Share This Term

Post on X Share on Facebook Share on LinkedIn

Discover a Term

Intermediate

net interest margin

The difference between interest income banks earn on loans and interest they pay on deposits, expressed as a percentage....