Mortgage rate hold in Canada: how a 60 to 130 day rate lock works, and what it is worth
You got pre-approved and the letter says your rate is held for 120 days. What does that actually protect, what happens if rates drop instead, and what happens on day 121? Here is the plain version, with a calculator for what your hold is worth.
On this page
Rate hold calculator
What does your rate hold protect?
| Rate at closing | Monthly payment | Interest over the term | Versus held rate |
|---|
Payments use Canadian semi-annual compounding. "Rate falls" only helps you if your lender gives you the lower rate; ask whether it does. Illustrative only. Real offers depend on your lender, approval and the property.
What a rate hold is
When you get a mortgage pre-approval, the FCAC says the lender's process may let you:
- know the maximum amount of a mortgage you could qualify for
- estimate your mortgage payments
- lock in an interest rate for 60 to 130 days, depending on the lender
That lock is the rate hold, sometimes called a rate guarantee or rate lock. It is a promise from that lender about the rate, for a set number of days, if your mortgage goes ahead with them. The exact number of days is the lender's choice, which is why one letter says 90 days and another says 120. Read the date on your letter, not a number you saw online.
Different lenders use different names for each step. The FCAC notes pre-approval may also be called prequalification or preauthorization, and that lenders have their own definitions and criteria for each step. Some steps may only estimate a rate rather than hold it. Ask which one you have.
What a rate hold does not guarantee
This is where people get surprised. The FCAC is direct: the pre-approval process does not guarantee your approval for a mortgage, and the pre-approval amount is the maximum you may get, not a promise you will get it. A lender could refuse you even after pre-approval. Before final approval the lender checks that the property meets its standards, and each lender has its own guidelines.
So a rate hold protects the rate. It does not protect:
- The amount. The final mortgage depends on the property's value and your down payment.
- The approval itself. A change in income, new debt, or a weak appraisal can change the answer.
- Your stress test result. You still need to qualify at the higher qualifying rate. See our mortgage stress test guide.
Practical rule: once you are pre-approved, avoid opening new credit or taking on new payments until you close. Our guide on hard and soft credit checks explains which checks show on your report.
Worked example: what a 120-day hold is worth
You are pre-approved for $600,000 over 25 years with a 4.5% rate held for 120 days. You find a home and close in month three.
If rates rise to 5.0% before you close
- Payment at the held 4.5%: $3,320.84 a month
- Payment at 5.0%: $3,489.63 a month
- Difference: $168.79 a month, or $10,127.53 in payments over a five-year term
- Interest over the first 60 months: $126,029 at 4.5% versus $140,423 at 5.0%, a gap of about $14,394
The hold did its job. A half-point move during a home search is the scenario it exists for.
If rates fall to 4.2% instead
At 4.2% the payment would be $3,221.51, about $99.33 a month less than the held rate, and roughly $8,610 less interest over five years. Whether you get it depends on your lender. The FCAC's list of questions includes asking whether you will automatically get the lowest rate if interest rates go down while you are pre-approved. If the answer is no, you may need to ask, or compare a new quote.
If you close on day 131
If the hold expires before you close, the held rate no longer applies and you get whatever that lender offers on the day. That is why the FCAC also suggests asking whether the pre-approval can be extended. Build a buffer into your search timeline, especially for new builds where closing dates move.
Timing: rate holds for a purchase vs a renewal
Buying a home
Get pre-approved before you start making offers, not after. The clock starts when the hold is issued, so a hold you get months before you are ready may run out mid-search. Shopping a few lenders is normal; the FCAC encourages comparing options from different lenders and brokers.
Renewing or switching
The FCAC says to start shopping around a few months before the end of your term, and not to wait for the renewal letter. Federally regulated lenders must send a renewal statement at least 21 days before the term ends. If a new lender offers you a rate today, ask how long it is held and line that up with your renewal date. Our mortgage renewal guide covers the statement and how to compare offers, and the stress test guide explains why a straight switch at renewal no longer requires the qualifying rate.
Breaking early to grab a held rate
If you are mid-term, a held rate elsewhere only helps if the savings beat your prepayment penalty. Run that first with our mortgage penalty guide, or compare a blend and extend with your current lender.
Questions to ask before you rely on a rate hold
The first three come straight from the FCAC's list. The rest are practical follow-ups.
- How long do you guarantee the pre-approved rate? Get the expiry date in writing.
- If rates go down while I am pre-approved, do I automatically get the lower rate?
- Can the pre-approval be extended? And at what rate?
- Is this a rate hold or an estimate? Some steps only estimate.
- Which product and term does the hold cover? A five-year fixed hold may not carry over if you switch to variable or a different term.
- What conditions could still change the rate? For example, a different down payment or property type.
Options people compare
| Approach | What it gives you | Watch for |
|---|---|---|
| One pre-approval with a hold | Simple; rate protected for the hold period | Expiry date; may not pass on rate drops |
| Quotes from several lenders or a broker | A comparison point if rates move | Each application may involve a credit check |
| Wait and apply closer to closing | No expiry pressure | No protection if rates rise while you shop |
Want to see payments at different rates side by side? The calculators page has a mortgage payment tool, and the variable vs fixed guide covers the term choice the hold is tied to.
Questions people ask
How long is a mortgage rate hold in Canada?
The FCAC says lenders may let you lock in an interest rate for 60 to 130 days, depending on the lender. A 120-day hold falls inside that range, but your pre-approval letter sets the actual date.
Does a rate hold mean I am approved?
No. The FCAC says pre-approval does not guarantee approval for a mortgage. The lender still checks the property, your down payment and your finances before final approval.
What happens if rates drop during my rate hold?
It depends on the lender. The FCAC recommends asking whether you will automatically get the lowest rate if rates go down while you are pre-approved.
What happens when my rate hold expires?
The held rate no longer applies, and the lender will quote its current rate. Ask in advance whether the pre-approval can be extended, as the FCAC suggests.
Does a pre-approval affect my credit score?
The FCAC says lenders likely run a credit check during pre-approval. A hard inquiry can have a small effect on your score, so ask what kind of check the lender uses.
Can I get a rate hold for my mortgage renewal?
The FCAC suggests shopping around a few months before your term ends, so you can collect quotes early. How long a quote is held is up to each lender, so ask for the date in writing.
Looni's countdown tracks your renewal date and the calculators show what a rate move does to your payment, so you can line up a hold with your closing or renewal. Read-only, no advice, just the arithmetic.
Sources
Financial Consumer Agency of Canada, Getting preapproved for a mortgage (lock a rate for 60 to 130 days depending on the lender, pre-approval does not guarantee approval, likely credit check, questions to ask about the guarantee period, lower rates and extensions) and Renewing your mortgage (21-day renewal statement, shop a few months before the end of your term). Payment and interest figures computed by Looni with semi-annual compounding.