Locking in an interest rate allows a borrower to select a current rate of his or her preference and reserve that rate for a period of time (refer to your mortgage lender for more details). Because interest rates can fluctuate at any time with inflation and economic conditions, borrowers may choose to lock in a rate to protect themselves from these fluctuations.
A lock is an agreement created between the borrower and the lender. The agreement stipulates the number of days for which a loan's interest rate and discount points are guaranteed. If interest rates rise during that time period, the lender must honor the agreed upon rate. If interest rates fall during the term of the agreement, the borrower must honor the agreed upon rate.
