What is a lock rebate?

A lock rebate is a financial incentive offered by lenders to borrowers when they lock in an interest rate on a loan, typically a mortgage. This rebate can reduce closing costs or provide a cash benefit at the loan's closing. It serves as a way to encourage borrowers to secure a loan at a specific rate, often in a fluctuating interest rate environment. The amount of the rebate may vary based on the terms of the loan and market conditions.