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I was just exploring UPDLOCK hint in SQL-Server 2008 and I found it is very useful in avoiding certain deadlock scenarios. There are always some side effects when using these types of lock hints but I could not find any for this one.

So what happens if I use it in all my update queries? I am not talking about select, just update. How will it affect me negatively?

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I could be wrong, but using UPDLOCK with UPDATE should have no effect whatsoever; this is the default behaviour of UPDATE. I've only ever used UPDLOCK on SELECT statements. –  Jon Seigel Mar 21 at 13:53
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it does have an effect when there are bookmark lookups involved and using UPDLOCK avoids deadlock situations by holding locks on the nonclustered index keys till the end of the transaction. But thats a positive thing. Iam searching for a negative impact of using this lock with the update statement. –  user35964 Mar 25 at 10:29
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