Interest rates fluctuate. One week they’re down, the next they spike 50 basis points. Rate protection gives you insurance against volatility — and it’s one of the most underutilized tools in private lending.
What Is Rate Protection?
Rate protection (sometimes called a rate lock or rate cap) guarantees your interest rate won’t exceed a certain level for a specified period. If rates drop, you benefit. If rates rise, you’re protected.
When Rate Protection Matters Most
- DSCR loans: You’re holding long-term. A rate increase of 1% on a $500K loan costs $5,000/year in extra interest
- Portfolio loans: Multiple properties amplify rate risk
- Rising rate environments: When the Fed is signaling increases
Hard Hat Capital Rate Protection
We offer rate protection on our DSCR, Multifamily, Portfolio, and Bridge Choice programs. It’s an optional feature that can save you thousands over the life of your loan.