How Does a Mortgage Rate Lock Work?

What is a rate lock?

Interest rates can move daily based on broader market conditions. A rate lock is a commitment from your lender to honor a specific interest rate for a defined period of time, protecting you from rate increases during that window while your loan moves through processing and underwriting. Without a lock, the rate you were quoted is not guaranteed until it is formally secured.

How long do rate locks typically last?

Lock periods vary by lender and loan type, and are often chosen to match your expected closing timeline. Common lock periods include shorter windows for loans expected to close quickly and longer windows for new construction or purchases with extended timelines. Longer lock periods sometimes come with a slightly different pricing than shorter ones, since the lender is taking on rate risk for a longer stretch.

What happens if my closing is delayed past the lock expiration?

If underwriting, appraisal, or title issues push your closing date past the lock expiration, you generally have a few options depending on your lender's policies. An extension can often be requested, which may involve a fee or a small rate adjustment depending on the lender and how long the extension needs to be. In some cases, if a lock expires without an extension, the loan may need to be relocked at current market pricing, which could be higher or lower than your original rate.

What is a float-down option?

Some lenders offer a float-down feature, either built into certain lock products or as an add-on, which allows you to take advantage of a lower rate if the market improves after you lock, subject to specific conditions set by that lender. Not all lenders offer float-down options, and the terms vary, so it is worth asking directly whether this feature is available and what triggers it.

When should you lock your rate?

There is no universal answer, since it depends on your risk tolerance, your closing timeline, and market conditions at the time. Some borrowers prefer to lock as soon as they have an accepted contract to remove uncertainty, while others may wait if they are comfortable with the possibility of rates moving in either direction. Discussing your specific timeline and comfort level with your loan officer can help determine timing.

• Ask what lock periods are available for your loan type and timeline.
• Ask whether extensions are available and what they typically cost.
• Ask whether a float-down option exists and what conditions apply.
• Confirm your lock expiration date in writing and track it against your expected closing date.

Rate lock terms, availability, and pricing vary by lender and change with market conditions. Confirm specifics directly with your loan officer before relying on any lock period or feature.