Updated July 21, 2026
A rate lock is a lender's contractual commitment to hold a specific interest rate for a borrower through closing, for a set window (often 30–90 days), insulating the deal from rate movement between application and funding.
Locks aren't free — lenders typically charge a fee or build in a small rate premium for the commitment, and locking too early relative to an uncertain closing date risks a costly extension fee or a lock that expires before funding. Rate locks are especially consequential on agency and HUD executions, where underwriting-to-close can run months.
In a still-elevated-rate environment, buyers underwriting an LA multifamily acquisition often negotiate for the seller's cooperation on timeline specifically so their rate lock doesn't expire before close — a scheduling detail that can matter as much to a deal's economics as the purchase price itself.
From the Sterman LA Multifamily Glossary — defined the way a broker actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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