What is a rate lock?

A rate lock is a lender's guarantee that the interest rate quoted to a borrower will remain in effect through the closing date, provided that closing occurs within a specified timeframe — typically 30, 45, or 60 days. Because interest rates fluctuate with market conditions, a rate lock protects the buyer from the risk of rates rising between the time of application and the actual closing. In exchange for this protection, some lenders charge a fee, while others build it into their pricing.

In the Western Catskills, where the closing timeline can sometimes extend due to the complexity of rural transactions — inspections of wells and septic systems, surveys of large parcels, or title work on properties with lengthy ownership histories — securing a rate lock with sufficient time is important. Buyers in Delaware, Otsego, Greene, and Ulster counties should discuss realistic closing timelines with their attorney and lender early in the process and select a rate lock period that provides adequate cushion. If a closing is delayed beyond the lock period, extensions may be available but often at a cost.