Applying for a mortgage means you’ll hear many key terms. Two that often cause confusion are Loan Estimate and Rate Lock Agreement.
Both involve your loan’s interest rate and costs, but they serve different purposes. A Loan Estimate displays what your loan would look like based on current conditions. A Rate Lock Agreement secures your rate for a set period, protecting you from market changes.
Understanding both helps you avoid surprises and lock in your most attractive deal.
Key Takeaways
Rate Lock Agreement:
A written commitment from your lender guaranteeing your interest rate and terms for a set period (typically 30–60 days), as long as you close within that window.
Loan Estimate (LE):
A standardized, government-required disclosure (TRID form) outlining projected loan costs, interest rate, and terms after applying for a loan.
Biggest Difference:
Loan Estimate = an informational snapshot.
Rate Lock Agreement = a guarantee of your rate and terms.
💡 Pro Tip: Normally, you’d compare Loan Estimates and rate locks from multiple lenders. Platforms like Fincast let you benchmark a single Loan Estimate against vetted lenders, helping you shop efficiently without extra credit pulls or spam.
What Is a Rate Lock Agreement?
A Rate Lock Agreement is your lender’s written promise to honor a specific interest rate and terms for a defined period.
A Rate Lock typically includes:
Locked interest rate and loan program
Lock period (e.g., 30, 45, or 60 days)
Expiration date
Conditions for keeping or losing the lock (e.g., appraisal value, credit score, or loan amount changes)
If you don’t close before your lock expires, you may need to extend it (often for a fee) or accept the new market rate.
👉 Think of your Rate Lock Agreement as insurance for your interest rate — it protects you from market volatility until closing.
What Is a Loan Estimate?
A Loan Estimate (LE) is the three-page federal disclosure lenders must provide within three business days of receiving your full loan application.
It shows your real projected costs and terms, including:
Loan amount and interest rate (as of the date issued)
Estimated monthly payment (principal, interest, taxes, insurance)
Total closing costs
Cash to close
APR and whether your rate is locked or floating
Unlike the Rate Lock Agreement, your Loan Estimate doesn’t guarantee your rate — it’s for comparison and planning.
Loan Estimate vs Rate Lock Agreement: Side-by-Side
Feature | Loan Estimate | Rate Lock Agreement |
|---|---|---|
When You Get It | Within 3 business days after applying for a mortgage | After you choose to lock your rate |
Purpose | Shows current loan terms and costs | Guarantees your rate and terms for a set period |
Legal Requirement | Federally required (TRID rule) | Optional, but must be documented if locked |
Accuracy | Reflects market rate | Fixed and guaranteed until expiration |
Best For | Comparing loan offers between lenders | Protecting yourself from rising interest rates |
How Should I Use Both When Buying a Home?
Both documents play a critical role — one helps you compare lenders, the other locks in your chosen deal.
Step 1: Apply for Your Loan
After completing a loan application, your lender must send you a Loan Estimate within three business days.
Step 2: Review and Compare
Use your Loan Estimate to compare lenders’ rates and fees across lenders..
Step 3: Upload Your Loan Estimate to Fincast
Upload your Loan Estimate to Fincast to instantly compare your rate and fees across vetted lenders, to help you secure the best deal.
Step 4: Decide When to Lock
Once you’re comfortable with your lender and rate, request a Rate Lock Agreement to protect your rate during loan processing.
Step 5: Close Confidently
Track your lock’s expiration. If delays occur, ask about extensions before it expires.
Why a Rate Lock Agreement Matters
Mortgage rates fluctuate daily. Without a lock, your interest rate can increase before closing — potentially costing thousands over the life of your loan.
A Rate Lock Agreement gives you certainty in an uncertain market. But there’s a downside.
If rates drop, you typically won’t qualify for the lower rate unless your lender allows a “float-down,” often for a small fee. Pro tip: Compare your Loan Estimates first, then lock the rate on the loan with the most attractive terms.
Compare Loan Estimates Effortlessly Using Fincast
Comparing Loan Estimates doesn’t have to be hard. Use Fincast to instantly compare rates and fees from multiple lenders by uploading a single Loan Estimate.
Upload your Loan Estimate once — Fincast benchmarks it against vetted lenders to find better offers.
✅ No duplicate applications
✅ No extra credit pulls
✅ No spam
You get all the benefits of comparison shopping, both before and after locking your rate.
FAQs
1. Is a Loan Estimate the same as a Rate Lock Agreement?
No. A Loan Estimate shows current loan details; a Rate Lock Agreement guarantees your rate for a set time.
2. When should I lock my rate?
Once you’re comfortable with your Loan Estimate and nearing closing, locking protects you from rising rates.
3. Can I relock if rates drop?
Some lenders allow a “float-down” option for a small fee. Ask before locking.
4. Does the Loan Estimate show if my rate is locked?
Yes — it indicates whether your rate is currently locked or floating.
5. How does Fincast help with rate locks?
Fincast benchmarks your Loan Estimate against other lenders, helping you understand whether your locked rate is truly competitive.
Bottom Line
Loan Estimate helps you compare offers.
Rate Lock Agreement helps you protect your chosen rate.
With Fincast, you can compare, lock, and shop with confidence — all without multiple credit pulls or extra applications.
Pro Tips (Save These!)
✅ Review your Loan Estimate before locking your rate.
✅ Track your lock expiration date to avoid extensions or higher rates.
✅ Use Fincast to benchmark your locked rate against vetted lenders.
Action Checklist
☑️ Apply for your loan and receive your Loan Estimate
☑️ Compare lenders’ Loan Estimates side by side
☑️ Lock your rate with a Rate Lock Agreement
☑️ Upload your Loan Estimate to Fincast for benchmarking
☑️ Close before your lock expires to secure your rate
👉 Ready to lock smarter? Upload your Loan Estimate to Fincast and see if you can beat your rate today.
Disclaimer: Nothing in this content should be considered financial advice. The examples and data shared are for general information only and may not reflect your personal situation. We do not guarantee the accuracy or completeness of the information provided. Always do your own research and speak with a qualified financial advisor before making any financial decisions.
