The advantage of a ratelock is that it gives you the option to ‘lock in’ a fixed home loan interest rate for a period \u2014 typically up to 60 days \u2014 to protect you against interest rate increases.
\nTo enter a ratelock agreement you will need to have a confirmed settlement date, the exact loan amount, and an agreed interest rate (floating rates by their nature are variable and cannot be locked in).
\nOver the past few months the media has been advising people to negotiate home loan interest rates with their lender. However, unless you have a ratelock agreement in place, your newly negotiated interest rate isn’t necessarily guaranteed to apply on settlement day (or home loan roll-over, for those with existing facilities). The interest rate applicable to your loan is subject to change and will be drawn down on the prevailing interest rate of the day, which could be higher or lower than the rate first discussed or documented.
\nIn essence what you are likely to be negotiating is a discount on the interest rate. For example if the home loan interest rate is 5.75%pa for three years and you negotiate a discount of 0.2%, you may be thinking that your loan will draw down at 5.55%pa; however if interest rates move and the three-year rate increases to 5.85%pa your home loan will actually draw down on 5.65%pa.<\/p>\n","protected":false},"excerpt":{"rendered":"
The advantage of a ratelock is that it gives you the option to ‘lock in’ a fixed home loan interest rate for a period \u2014 typically up to 60 days \u2014 to protect you against interest rate increases. To enter a ratelock agreement you will need to have a confirmed settlement date, the exact loan […]<\/p>\n","protected":false},"author":1116,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"slim_seo":{"title":"WHAT DOES THE RATELOCK OFFER? - colinrealestate","description":"The advantage of a ratelock is that it gives you the option to 'lock in' a fixed home loan interest rate for a period \u2014 typically up to 60 days \u2014 to protect you"},"footnotes":""},"categories":[5532],"tags":[5533],"class_list":["post-453","post","type-post","status-publish","format-standard","hentry","category-real-estate-2","tag-real-estate"],"_links":{"self":[{"href":"https:\/\/colinrealestate.blogtown.co.nz\/index.php?rest_route=\/wp\/v2\/posts\/453","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/colinrealestate.blogtown.co.nz\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/colinrealestate.blogtown.co.nz\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/colinrealestate.blogtown.co.nz\/index.php?rest_route=\/wp\/v2\/users\/1116"}],"replies":[{"embeddable":true,"href":"https:\/\/colinrealestate.blogtown.co.nz\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=453"}],"version-history":[{"count":1,"href":"https:\/\/colinrealestate.blogtown.co.nz\/index.php?rest_route=\/wp\/v2\/posts\/453\/revisions"}],"predecessor-version":[{"id":454,"href":"https:\/\/colinrealestate.blogtown.co.nz\/index.php?rest_route=\/wp\/v2\/posts\/453\/revisions\/454"}],"wp:attachment":[{"href":"https:\/\/colinrealestate.blogtown.co.nz\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=453"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/colinrealestate.blogtown.co.nz\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=453"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/colinrealestate.blogtown.co.nz\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=453"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}