JA Hockey Ventures

Locking-in the rate means that the lender commits to the mortgage interest rate for the loan typically at the time the loan application is submitted. By floating the rate, you can lock-in the interest rate anytime between the loan application day and closing. Buyers opt to float the loan when they believe interest rates will drop after their loan application date and prior to closing. The risk is that rather than dropping, interest rates may rise, increasing the mortgage payment.