A mortgage rate hold is a lender's promise to guarantee a quoted interest rate for a set number of days while you shop for a home, usually 90 to 120 days in Canada. If market rates climb during that window, you keep the lower rate you were originally quoted. Should rates fall instead, most lenders will let you take the new lower number.
A rate hold almost always comes attached to a mortgage pre-approval. When you get pre-approved, the lender reviews your income, debts, and credit, then commits to a rate that stays available for the length of the hold. There is no fee for this in Canada, and no obligation to go through with that lender. Walking away costs nothing.
Lengths vary by lender. Most major banks hold a rate for 120 days, which has become the informal standard. BMO runs one of the longer windows at 130 days. Some lenders and brokers arrange shorter holds around 60 days, or in select cases stretch closer to 180. Ask what the number is before you assume anything, because the clock starts the day the hold is issued, not the day you find a place you want.
The hold protects the rate, not the loan itself. It stays conditional on full approval, so the lender still has to verify your documents and sign off on the specific property once you are in a deal. Your file also has to clear the mortgage stress test, where lenders qualify you at a rate higher than the one being held. A rate hold is also not the same thing as a mortgage commitment letter, which is the formal document a lender issues after it approves a mortgage on an actual home.
For a Toronto buyer, the real value is time. A search in this market can run for weeks or months, and a held rate means a sudden move by the Bank of Canada will not reprice your budget partway through. If your hold is close to expiring and you still have not bought, you can usually request a fresh one, though the new rate will reflect wherever the market sits that day.
Related reading: Pre-Qualified vs Pre-Approved for a Mortgage, Fixed vs Variable Mortgage in Canada, and What Is a Mortgage Renewal and Your Options in Ontario.
