You may want to consider protecting or locking your rate if you prefer knowing your rate won’t exceed a guaranteed maximum interest rate—even if mortgage rates rise before you close your mortgage. (Unless otherwise prohibited by state law, an associated fee is required for rate protection and rate lock.)

There is a one-time option to lock the interest rate within the specified number of days prior to closing. If you do not exercise the one-time lock option five (5) days prior to closing, the loan will be locked into either the lower of the current market rate or the rate protected rate.

There is not a floor or limit on how low the interest rate can go in a decreasing interest rate environment. If on the one-time lock option date, the current interest rate is the same as rate protection rate before the cap was applied, the rate will not include the cap.

This allows you the security of locking in an interest rate, yet provides the flexibility of taking advantage of a lower rate should the market move in your favor.

Thus, rate protection allows you to establish a maximum rate at closing with the ability to receive a lower rate if rates drop (provided your closing date does not extend past the rate protection term). In the event that rates decrease, you will have a one-time float-down option to lock into a lower rate, regardless of how low rates fall.

Prior to choosing a home, you can opt for a 90-day rate protection when you use our Qualified Buyer Program to obtain a conditional pre-approval for a loan.

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What you should know

• Available for home purchases, refinances and conditional pre-approvals.
• 30, 60 and 90-day options are available when purchasing a home.
• A 90-day option is available when refinancing a home. Rate protection is not available on refinances for conforming Adjustable-Rate Mortgages (mortgages up to $417,000).
• Rates can be selected and protected once a pre-purchase application has been approved. The only option available for pre-purchase rate locks is a 90-day Rate Protection program. 
• If rates increase before your loan closing, the protected rate does not increase beyond your cap rate.
• If rates decrease before your loan closing, you have a one-time option to lock at the lower rate.
• For the 30-day purchase option, you will have a 25-day window between 30 and 5 days¹ prior to closing to use the one-time float-down option.
• For the 60- day purchase option, you will have a 55-day window between 60 and 5 days¹ prior to closing to use the one-time float-down option.
• For the 90-day purchase or refinance option, you will have a 55-day window between 60 and 5 days¹ prior to closing to use the one-time float-down option.

If you have not used your one-time float-down option 5 days¹ prior to your scheduled closing date, you will receive the lower of your protected rate or the current market rate 5 days¹ prior to closing.

Rate Protection can be selected throughout the loan origination process, as long as the rate is currently floating.

Lock Your Rate

In addition to Rate Protection, a Rate Lock option is also available at any time during your loan process once a contract of sale has been secured, provided your closing date does not extend past the lock term. Unlike rate protection, the rate lock option does not provide the opportunity to choose the lower rate in the event that rates fall.

What you should know
Available for home purchases and refinances after a closing date has been set.

• 30, 60, 90 and 120-day options are available when purchasing a home. (The 30-day rate lock option may not be available during high volume mortgage activity.) The 120-day option is not available with a refinance transaction.

• Merrill Lynch Home Loans^TM is currently requiring a 90-day rate lock for conforming and nonconforming refinance transactions (excluding PrimeFirst^®). Complex transactions are also 90 days.²

¹Please Note: "In escrow (community property) states," your rate lock window may be different. Please consult your Merrill Lynch Financial Advisor for this information.

²Please note complex transactions such as those requiring subordination or modification consolidations are 90 days. The policy is subject to change at any time.