- A lender's guarantee that the quoted mortgage rate will not change for a specific period. The borrower wants the lock to stay in effect until closing.
locking in a mortgage
Related Terms and Acronyms
- Adjustable-Rate Mortgage (ARM) — Acronym,
➥ A type of variable rate mortgage product.
- A type of mortgage loan program in which the interest rate and payments may be adjusted as frequently as every month. The principal loan balance or term of the loan may also be adjusted to reflect the rate change. The purpose of the program is to allow mortgage interest rates to fluctuate with market conditions.
- Convertible Mortgage — Definition, Important,
- A mortgage where the borrower has the option at specified times to change the term length.
- Debt Consolidation — Definition,
- The replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. It's also called a consolidation loan. CanEquity has access to Canada's best debt consolidation products, for more info about debt consolidation see our debt consolidation page.
- Fixed Rate Mortgage (FRM) — Acronym, Very Important,
- A loan in which the interest rate and payments remain the same for the entire life of the loan. The interest rate and payment amounts are set at the time of loan origination.
- Hybrid Mortgage — Definition,
- A mortgage split into different components in order to better manage risks and costs.
- Loan Term — Definition,
- The period specified in the promissory note for a borrower to pay a loan, such as a mortgage. Most conventional mortgages have a loan term of 5 or 10 years.
- Rate Hold — Definition,
- The length of time, typically between 60 and 120 days, that a lender will guarantee a loan's interest rate once you are locked in.
- Rate Lock-in — Definition,
- A written agreement in which the lender guarantees the borrower a specified interest rate, provided the loan closes within a set period of time.
- Refinance — Definition,
- To arrange a new loan for an increased amount or better terms whereby the old loan is paid off from the proceeds of the new loan.
- Term — Definition,
- The length of time you commit to repay a lender or bank at an agreed upon interest rate and payment schedule. The interest rate usually remains constant during this term unless the commitment states otherwise. For example, a five year fixed rate mortgage has a term of five years.
- Variable Interest Mortgage — Definition, Important,
- A loan where the interest rate may vary during the term of the mortgage. The variance is usually tied to some specific factor such as prime bank rate or the guaranteed investment certificate rate for a designated lender.
- Variable Rate Mortgage (VRM) — Acronym, Very Important,
➥ A type of mortgage loan offered by brokers and lenders.
- Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."