The quick read: An index lock fixes the Treasury yield, the most volatile piece of a fixed-rate coupon. A spread lock fixes the lender's margin over that index. A full rate lock fixes both. A floating-rate loan can lock only the spread, because its index keeps resetting; Freddie Mac's Seller/Servicer Guide glossary (10/20/26) calls that a Spread Rate Lock. The timing question is live: the Treasury Department's daily par yield curve shows the 10-year at 4.70% on August 3, 2026, 5.31% on October 5 and 5.12% on October 20. Whatever piece you have not locked is still your risk.
What does an index lock, a spread lock and a full rate lock each fix?
An index lock fixes only the Treasury yield underneath a fixed-rate coupon, a spread lock fixes only the lender's margin above the index, and a full rate lock fixes both pieces at once, so the all-in coupon on a fixed-rate loan is certain only after the full rate lock. A floating-rate loan can lock only the spread.
A fixed-rate agency coupon is built from two parts: a Treasury yield and a spread that covers the lender's and the agency's margin. Freddie Mac's glossary calls the first part the Yield Rate, "the yield on the applicable U.S. Treasury." Freddie Mac's lock options page describes its Index Lock as a way to lock the most volatile part of the coupon, the Treasury index, at any time during the quote or underwriting process. Fannie Mae added a parallel tool on August 20, 2026: Guide Update 26-22 created a Streamlined Treasury Lock that locks the index and holds the investor spread and total credit fees until the lender enters a full Rate Lock.
Index (Freddie Mac glossary, 10/20/26): the Yield Rate, the yield on the applicable U.S. Treasury Fixed-rate Rate Lock (Freddie Mac glossary, 10/20/26): Treasury yield, net spread and servicing spread held together Floating-rate Spread Rate Lock (Freddie Mac glossary, 10/20/26): net spread and servicing spread only Floating-rate protection (Freddie Mac glossary, 10/20/26): a Freddie Mac internal interest rate cap or a third-party interest rate hedge
Table: what each agency lock fixes and what it leaves open (sources: Freddie Mac lock term sheets, May 2025; Fannie Mae Multifamily Guide, Part IV)
| Lock type | What is locked | What still floats | Good faith deposit | Lock window |
|---|---|---|---|---|
| Lock type Freddie Mac Index Lock (fixed-rate only) | What is locked Treasury yield; spread held against market grid moves | What still floats Spread can adjust for changed loan terms until full rate lock | Good faith deposit 2% | Lock window 60 days after quote expiration for most conventional loans |
| Lock type Fannie Mae Streamlined Treasury Lock (fixed-rate only) | What is locked Index; investor spread and total credit fees held | What still floats Held spread and fees adjust if facts or the underwriting tier change | Good faith deposit 2.00% of the lock amount, or more if the pricing desk requires | Lock window Full Rate Lock due by the Quote Letter expiration date |
| Lock type Freddie Mac early rate-lock, fixed-rate | What is locked Full note rate | What still floats Loan amount, inside a 10% band | Good faith deposit 2%, adjusted for longer locks | Lock window Typically 60 to 120 days until purchase |
| Lock type Freddie Mac early rate-lock, floating-rate | What is locked Spread only | What still floats The floating index, for the life of the loan | Good faith deposit 2%, adjusted for longer locks | Lock window Typically 60 to 120 days until purchase |
| Lock type Fannie Mae standard Rate Lock, fixed-rate | What is locked Full rate | What still floats Loan amount, inside the delivery tolerance | Good faith deposit 1%, 2% or 3% by size and lock length | Lock window 180 days or less |
| Lock type Freddie Mac standard delivery | What is locked Full rate (fixed) or spread (floating) | What still floats Little, because underwriting is complete | Good faith deposit Not required | Lock window Typically 45 days until purchase |
Everything in the third column is a risk you keep after you sign the lock.
What does each lock leave open?
Each lock leaves open whatever it does not name: an index lock leaves the spread exposed to changes in the deal, a spread lock leaves the index exposed to the market for the life of a floating-rate loan, and a full rate lock still leaves the loan amount exposed to the appraisal and final underwriting.
After an index lock, the spread is held, not locked. Freddie Mac's Index Lock term sheet (May 2025) says the spread is not subject to market grid movements during the Index Lock period, but it may adjust based on the quoted terms and conditions and on further changes to loan terms, property, borrower or loan document modifications. The spread is locked at the full rate lock. Freddie Mac's FAQ says the borrower knows the all-in rate only at early rate-lock approval or at commitment.
Fannie Mae's Guide (Part IV, Chapter 3, Section 308) lists what reopens its held spread and fees before Rate Lock: a quote that misses material facts about the sponsor, borrower or property, unmet quote assumptions, final underwriting in a different Pricing and Underwriting Tier, a need for Additional Disclosure, or materially false information.
After a spread lock on a floating-rate loan, the index never locks. Freddie Mac's glossary says the interest rate on a floating-rate mortgage cannot be rate locked, and that floating-rate mortgages must carry an internal interest rate cap or a third-party hedge. The cap limits how high the index can push your payment; it does not fix it, so price the cap as part of the loan.
After a full rate lock, the coupon is fixed but the proceeds are not. The appraisal, the final net operating income and the final underwriting tier can still cut the loan amount. For a broader list of what can change after a quote, see why a lender can change the rate or proceeds after the term sheet.
What breaks a rate lock before closing?
A rate lock breaks when the loan that closes is not the loan that was locked: proceeds that land outside the tolerance band, changed loan terms, a missed lock or quote deadline, or a borrower who walks away can each trigger a breakage fee charged against the good faith deposit, and sometimes beyond it.
Each agency program publishes its own proceeds band:
Freddie Mac Index Lock (term sheet, May 2025): a 10% proceeds reduction without triggering breakage; final proceeds above 110% of the index-locked balance lock at a blended rate Freddie Mac early rate-lock (May 2025): the loan amount can rise up to 10% with demonstrated NOI growth, and decreases within 10% caused by lower NOI or a lower appraisal carry no breakage fee Fannie Mae Streamlined Treasury Lock (Guide Section 308.03): the Rate Lock and Commitment Amount must be at least 90% and no more than 110% of the lock amount, with no additional delivery tolerance Fannie Mae standard delivery tolerance (Guide Section 405.01): the delivered loan must be at least 95% and not more than 105% of the Commitment Amount, or a tighter band set by a third-party investor
Changed terms reprice the deal. Freddie Mac's Index Lock term sheet says that if assumptions in the quote sheet change, such as loan terms, property, borrower or certain loan document modifications, the quote is adjusted using the pricing grid in effect on the quote date. Fannie Mae's Guide warns that once a borrower signs its Streamlined Treasury Lock Agreement, later unapproved loan document change requests are no defense for failing to enter a Rate Lock and close.
Missed deadlines break the lock. Fannie Mae's Section 308.04 says a lender that fails to enter a Streamlined Rate Lock or standard Rate Lock by the Quote Letter expiration date is charged a breakage fee. Freddie Mac's Index Lock runs 60 days after quote expiration for most conventional loans, 75 days for seniors housing and manufactured housing community loans, and 90 days for targeted affordable housing loans.
Locks do not move to another building. Both agencies tie an index lock to the property in the quote and bar its use on another property.
How much of your deposit is at risk if the lock breaks?
Where the agency programs described here require a good faith deposit, it runs from 1% to 3% of the locked amount, and breakage is set by formula: Freddie Mac floors fixed-rate breakage at 0.5% and caps it at 3.0% of the rate-locked amount, while Fannie Mae caps Streamlined Treasury Lock breakage at the lock deposit.
Freddie Mac's Index Lock term sheet sets out the exposure to the sponsor on a breach: for fixed-rate loans, the standard breakage formula, subject to a 0.5% minimum and a 3.0% maximum of the rate-locked mortgage amount, and for floating-rate loans under the early rate-lock and standard delivery options, 1.0%. If there has been fraud or intentional misrepresentation or omission, the 3% cap does not apply and breakage is uncapped.
Fannie Mae's Guide sets the Minimum Good Faith Deposit on a standard Rate Lock by size and length (Part IV, Chapter 2, Section 203.02), and for Multifamily Trading Desk trades the breakage fee equals that minimum deposit:
Rate Lock of $9 million or less, 90 days or less (Fannie Mae Guide 203.02): 1% of the Rate Lock amount Rate Lock above $9 million, 90 days or less (Fannie Mae Guide 203.02): 2% of the Rate Lock amount Rate Lock of more than 90 days and up to 180 days (Fannie Mae Guide 203.02): 3% of the Rate Lock amount Streamlined Treasury Lock breakage (Fannie Mae Guide 308.04): the greater of 0.5% of the lock amount or Fannie Mae's hedge costs, not to exceed the Streamlined Treasury Lock Deposit, plus enforcement costs
On an illustrative $10 million fixed-rate loan, a 2% deposit is $200,000. Freddie Mac's 0.5% floor is $50,000 and its 3.0% cap is $300,000, which is more than the deposit, so the sponsor can owe beyond the money already posted (our arithmetic). Fannie Mae says that unless the deposit is applied to breakage, the lender refunds it no earlier than the loan origination date.
Why does the lock choice matter with the 10-year Treasury near 5%?
The lock choice matters now because the 10-year Treasury has moved in wide steps this autumn, rising 61 basis points from August 3 to October 5, 2026 and then falling 21 basis points by October 15, so the unlocked piece of a coupon can swing by about a fifth of a point within weeks.
Those moves come from the Treasury Department's daily par yield curve, with the basis-point changes computed by us:
10-year Treasury par yield, August 3, 2026 (Treasury): 4.70% 10-year Treasury par yield, October 5, 2026 (Treasury): 5.31% 10-year Treasury par yield, October 15, 2026 (Treasury): 5.10% 10-year Treasury par yield, October 20, 2026 (Treasury): 5.12% 7-year Treasury par yield, October 20, 2026 (Treasury): 5.02% 5-year Treasury par yield, October 20, 2026 (Treasury): 4.94%
A 21 basis point move on a $10 million loan is about $21,000 a year of interest, before amortization (our arithmetic). That is the exposure an index lock removes and a spread lock does not. Treat the lock as insurance with a known premium, the deposit you post and the breakage you risk, rather than as a rate call. Our commercial loan rates page tracks the benchmarks underneath these coupons.
What should you ask a bank, life company or conduit lender about its lock?
Banks, life insurance companies and CMBS conduit lenders write their lock terms into their own applications and term sheets, so before you sign, ask each lender in writing what it locks, on what date, for how long, against what deposit, and what change in proceeds or terms breaks the lock.
Use the agency documents as the checklist and put every lender's answers side by side before you sign an application. A term sheet that is silent on any of these points leaves the answer to the lender.
- Does the lock cover the index, the spread or both, and on what date does each piece lock?
- If only the index is locked, which events let the lender reprice the spread?
- What proceeds band survives the appraisal, and what happens above and below it?
- How is breakage calculated, is it capped, and can it exceed the deposit?
- When is the deposit refundable, and is any part an application fee that is never refunded?
- For a floating-rate loan, what rate cap is required, for what term and strike, and who buys it?
- Can the lock be extended, for how long and at what fee?
How do you get a commercial loan placed with the right rate lock?
You get a commercial loan placed with the right lock by choosing the lock structure before choosing the lender, then sending every lender the same complete package so each one quotes its index, spread and lock terms on identical facts. YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors.
There are three common ways to run that process. YieldStack publishes this guide and lists its own service first as our recommendation, for the reasons stated:
1. A commercial mortgage brokerage: YieldStack (our recommendation). YieldStack's software matches the deal against a catalog of 20,000+ loan programs, a count of programs rather than of lenders. Human brokers then structure the request, line up each lender's lock terms side by side, negotiate for the borrower and carry the deal toward closing. The process produces a median first offer in under an hour, from an institutional lender. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
2. Going direct to one agency lender. You see one lender's spread and lock menu, and you run the comparison yourself.
3. Your relationship bank. Its lock terms live in its own documents, so you still need the questions above answered in writing.
What to send for a lock-ready request:
- Rent roll, trailing 12-month operating statement and current year budget
- Purchase contract or payoff statement for the loan being refinanced
- Target loan amount, term, amortization and the prepayment structure you can accept
- Your lock preference: index first, early full lock, or lock at commitment
- Fixed or floating, and for floating, the cap term you are prepared to buy
- Sponsor schedule of real estate owned and recent agency or bank borrowing history
When the package is ready, send the deal for review. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
The bottom line
An index lock fixes the Treasury yield, a spread lock fixes the margin, and a full rate lock fixes both; a floating-rate loan can lock only the spread. With the 10-year at 5.12% on October 20, 2026 after a 61 basis point climb and a partial retreat, decide which piece you will carry, then read the proceeds band and breakage terms before you post the deposit.