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Most deadbolt-lock manufacturers provide a template to help you install the lock. The template is designed to work with doors of different thicknesses and has reference points that may be marked on the door with an awl. The deadbolt should be at least 6" above your doorknob.
After you mark the reference points from the template, use a hole saw to begin cutting the hole for the deadbolt (Image 1). When the pilot bit on the hole saw comes through the other side of the door, stop cutting. Finish the hole from the other side of the door to prevent splinters. If your hole saw isn't deep enough to penetrate the exterior face of the door, use a standard bit to finish drilling the hole you'll use as a reference point (Image 2).
Use a 1 1/2" spade bit to drill a hole through the edge of the door for the bolt.
Dry-fit the bolt into the hole, and trace around the faceplate. Use a wood chisel to mortise the area around the faceplate so that it will be flush with the door. When using the chisel, keep the beveled side in toward the mortised area, and tap the tool deep enough to recess the faceplate. You may need a smaller chisel to mortise the rounded corners.
Continue mortising until the faceplate fits properly. Drill pilot holes, and secure the bolt to the door with screws.
Dry-fit the cylinder and thumb-turn plate so you'll know how the pieces fit together. Fit the exterior side onto the door first, making sure the writing is upright. Then set the interior piece in place, and align the screw holes with the mounting holes inside the lock. Fasten the deadbolt in place with screws.
Mark the end of the bolt with lipstick or paint. Close the door, and turn the deadbolt several times to mark the doorframe. Use a 7/8" spade bit to drill two overlapping holes in the doorframe for the deadbolt.
Mortise the area around the hole so the strike plate will fit flush with the doorframe. Drill pilot holes and secure the striker plate with screws.