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Why a RATE LOCK Has Become the Most Requested Mortgage Loan Option

Making decisions about permanent financing is always difficult.  Having to make these decisions during a turbulent rate environment makes it all the more challenging.  As Treasury and SOFR rates continue to rise, a ‘rate lock’ has now become the most requested loan option and for good reason.  By entering into a rate lock agreement, a commercial mortgage loan is protected from rate increases in the fluctuating market. Rate locks do come with conditions and possible penalties, so it’s really important to understand the pros and cons of a rate lock agreement. 


  • Once rate locked, your rate cannot increase based on market fluctuations
  • Rate locks can average between 30 and 90 days, as a general rule
  • Rate locks remove the anxiety associated with a rising treasury market


  • Once locked, your rate will not go down in a declining rate environment
  • Most Lenders require a rate lock deposit of between 1% – 2% which is refundable at loan closing
  • Locking too early can result in it expiring, defeating the whole purpose
  • Make sure to fully understand the conditions of the rate lock and under what circumstances the Lender can keep your rate lock deposit as a penalty

As a commercial real estate mortgage advisory firm, Progress Capital can provide the advice you need to manage the commercial real estate financing process.  

In recent news, Kathy Anderson arranged a $160 Million loan for the owner of 3 ACRES Apartment Complex in Jersey City, NJ.  The Borrower entered in a 90-day rate lock in March by posting a $2.4 Million rate lock deposit.  This strategic decision resulted in a savings of over $1.6 Million PER YEAR for ten years in additional interest payments.  For more details, CLICK HERE .

Progress Capital is a commercial real estate mortgage advisory company specializing in arranging debt for commercial real estate owners and developers since 1990. With over $40 Billion in closed loans and $150 Million of directly funded bridge loans, we get you to the closing table… Plain and Simple. #thatsProgress

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