GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Lock-in


Synonyms:locking in a mortgage
Filed Under: financial-banking, mortgages
Tags: banking, mortgage
 

Definition of lock-in

lock-in
1. 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.

Related Terms and Acronyms:

  • convertible mortgage   A mortgage where the borrower has the option at specified times to change the term length.
  • fixed rate mortgage (FRM)   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   A mortgage split into different components in order to better manage risks and costs.
  • loan term   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   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   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   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   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   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)   Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."
      ➥  A type of mortgage loan offered by brokers and lenders.

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