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A rate hold is a lender’s commitment to honour a specific interest rate for a set period, protecting a borrower from rate increases while they shop for a home or complete a purchase. It is typically offered alongside a mortgage pre-approval.
If rates rise before the borrower closes on a home, the rate hold protects them — they still get the held rate, not the higher current one. Some lenders also offer a “float-down”: if rates fall during the hold period, the borrower can take the lower rate instead. Policies on float-down, and how long a hold lasts, vary by lender.
Rate holds are usually attached to a pre-approval and most commonly apply to fixed-rate mortgages, since a fixed rate is what the hold is protecting. If the borrower doesn’t close before the hold expires, the lender will typically requote using current rates and terms.
Protects against rate increases: the borrower is guaranteed the held rate even if the lender’s posted rates rise before closing.
Float-down varies by lender: some lenders pass along a rate decrease during the hold period; others do not — check the specific lender’s policy.
Length is lender-specific: how long a rate is held for is set by each lender and can vary by mortgage type.
Typically fixed-rate only: rate holds are most commonly offered on fixed-rate mortgages, tied to a pre-approval.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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