What is a mortgage rate lock in Canada?

A mortgage rate lock (also called a rate hold or rate guarantee) is a commitment from a lender to hold a specific mortgage rate for you for a set period — typically 90 to 120 days. If rates rise during the hold period, you keep the locked-in rate. Rate locks are free at most Canadian lenders and are standard with mortgage pre-approvals.

How long does a mortgage rate hold last?

Most major Canadian lenders offer rate holds of 90 to 120 days. Some brokers can access 130-day holds. The hold period starts from the date of your pre-approval or rate commitment, not from when you find a home. For renewals, rate holds are typically 60 to 120 days before your renewal date.

What happens if rates drop after I lock in?

Most Canadian lenders offer a "float down" feature — if rates drop during your hold period, you get the lower rate automatically. This makes rate locks essentially risk-free: you are protected if rates rise and benefit if rates fall. However, confirm this with your lender, as some smaller lenders may not offer float-down protection.

Does a mortgage rate lock cost anything?

No. Rate locks are free at virtually all Canadian lenders and mortgage brokers. There's no fee to obtain the rate hold and no penalty for not using it. It's simply a guarantee that the rate will be available to you if you proceed within the hold period.

Should I lock in my mortgage rate now?

If you're buying a home or renewing within the next 90–120 days, there's almost no reason NOT to lock in a rate. Since most lenders offer float-down protection, you're protected if rates rise and still benefit if rates fall. The rate lock is free and gives you budget certainty during the most stressful part of the home-buying process.

Mortgage Rate Lock Explained: How Rate Holds Work in Canada

A mortgage rate lock is one of the most valuable — and least understood — tools available to Canadian homebuyers. It costs nothing, protects you from rising rates, and at most lenders, lets you benefit if rates drop. Here’s how to use it strategically.

What is a mortgage rate lock?

A rate lock (also called a rate hold or rate guarantee) is a written commitment from a lender to hold a specific mortgage rate for a set period. If you close your mortgage within that period, you get the locked-in rate — regardless of what happens to rates in the meantime.

Feature	Typical Terms
Cost	Free
Duration	90–120 days
Commitment required	None — you can walk away with no penalty
Rate direction protection	Locked if rates rise
Float-down	Most lenders give you the lower rate if rates drop

How rate locks work in practice

Step-by-step timeline

Step	What Happens	Timing
1. Get pre-approved	Lender offers a specific rate and locks it in	Day 0
2. Rate hold period begins	Rate guaranteed for 90–120 days	Day 0 → Day 120
3. You find a home & make an offer	Rate remains locked	Within hold period
4. Mortgage finalizes	You close at the locked rate (or lower if rates dropped)	Within hold period

What happens in different rate scenarios

During Your Hold Period	What You Pay
Rates rise by 0.50%	Your locked rate (you’re protected)
Rates stay the same	Your locked rate
Rates drop by 0.25%	The lower rate (float-down protection)
Rates drop by 0.75%	The lower rate (float-down protection)
Your hold expires and you haven’t closed	You need a new rate lock at current rates

Rate lock policies by lender type

Big 5 banks (RBC, TD, BMO, Scotiabank, CIBC)

Feature	Typical Policy
Hold period	120 days
Float-down	Yes — automatic
Applies to	Pre-approval and purchase
Renewal hold	60–120 days before maturity
Cost	Free

Mortgage brokers (multiple lenders)

Feature	Typical Policy
Hold period	90–130 days (varies by lender)
Float-down	Most lenders offer it — confirm with broker
Advantage	Can lock rates from multiple lenders simultaneously
Best strategy	Lock the best available rate, let broker monitor for lower options

Monoline lenders

Feature	Typical Policy
Hold period	90–120 days
Float-down	Usually available
Rates	Often lower than big banks (tighter spreads)
Access	Through mortgage brokers only

Credit unions

Feature	Typical Policy
Hold period	60–90 days (often shorter)
Float-down	Varies — not always available
Rates	Competitive, sometimes below banks
Note	Policies vary significantly between credit unions

When to lock in a mortgage rate

Best times to lock in

Scenario	Why Lock In Now
Bond yields are trending up	Fixed rates will follow — lock before they rise further
BoC is expected to hold or hike	Variable rates unlikely to improve — lock your fixed-rate option
You have a firm offer on a home	Eliminate rate risk during the closing period
You’re 90–120 days from renewal	Start early to protect against rate increases
Rate environment is uncertain	Lock in as insurance — it’s free and risk-free with float-down

When to wait

Scenario	Why You Might Wait
BoC rate cuts are expected and not priced in	Variable rates may drop; fixed rates may follow if bond yields decline
You’re more than 120 days from buying	Your hold will expire before you need it
You’re targeting variable rate	Rate locks typically apply to fixed rates

Rate locks for renewals

If your mortgage is renewing within the next 120 days, you can proactively lock in a rate:

Strategy	How It Works
Current lender	Most banks offer a renewal rate 60–120 days before maturity. Accept it to lock in, then negotiate for lower.
New lender	Get pre-approved with a new lender 90–120 days before renewal. Lock the rate. If your current lender beats it, stay.
Broker approach	A broker can lock rates with multiple lenders simultaneously and match the best available rate at closing.

Renewal rate lock strategy

120 days out: Get a rate lock from a competing lender (through a broker)
90 days out: Receive your renewal offer from your current lender
60 days out: Use the competing rate lock to negotiate with your current lender
30 days out: Finalize your choice with the best available rate

Rate locks for variable-rate mortgages

Rate locks work differently for variable mortgages:

Feature	Fixed Rate Lock	Variable Rate Lock
What’s locked	The actual interest rate	The discount off prime (e.g., prime − 0.80%)
Duration	90–120 days	Often shorter (60–90 days)
Float-down	Yes (rate)	Your discount is fixed, but prime may change
Rate protection	Full protection against rising fixed rates	Protected against worsening discounts, not against BoC hikes

Common questions about rate locks

Can I lock rates with multiple lenders?

Yes. Through a mortgage broker, you can have rate holds with multiple lenders simultaneously. There’s no exclusivity requirement and no cost. This gives you the flexibility to choose the best option at closing.

What if my rate hold expires?

You’ll need to request a new rate hold at the current market rate. If rates have risen, you’ll get the higher rate. There’s no penalty for letting a hold expire.

Is a rate hold the same as a pre-approval?

Not exactly. A pre-approval includes both a rate hold AND a preliminary credit/income assessment. A rate hold alone only guarantees the rate — the lender still needs to verify your application at closing. Most rate holds come as part of a full pre-approval.

Can I extend a rate hold?

Some lenders allow extensions, but it’s not guaranteed. If your hold is about to expire and you need more time, ask your lender or broker about extension options. In some cases, the lender may reissue a new hold at the current rate.