Mortgage Rate Locks Explained: When to Lock, How Long and What Can Go Wrong

Mortgage rates rose steadily this summer, with Freddie Mac's weekly average for a 30-year fixed loan moving from 6.30% in mid-April to 6.55% in mid-July. When rates are moving, a rate lock is what stands between the payment you planned for and the payment you end up with. Here is how locks work and how to use them well.

What a rate lock is

A rate lock is a lender's commitment to hold a specific interest rate and price, including any points or credits, for a set period while your loan is processed. If market rates rise during the lock period, your rate does not change. If they fall, a standard lock usually keeps you at the locked rate unless you have a float-down option.

Once you lock, your lender must send you a revised Loan Estimate within three business days showing the locked terms. Keep it with your other loan documents.

How long should you lock?

Locks are typically offered for 30, 45 or 60 days, and sometimes longer. Longer locks protect you for more time but usually cost a little more in rate or points.

Situation	Typical lock length
Refinance with documents ready	30 to 45 days
Resale purchase with a standard 30 to 45 day contract	Matched to the closing date, plus a small cushion
Condo purchase that needs a project review	45 to 60 days
New construction	Extended locks or a builder lock program, often 90 days or more

The goal is to cover your realistic closing date. Florida purchases sometimes slip because of insurance binding, condo questionnaires, appraisal scheduling or title issues, so a few extra days of cushion are often worth the small cost.

When should you lock?

• Purchases: most buyers lock once they have a signed contract and have chosen their loan program.
• Refinances: lock once the numbers work for you and you have decided to proceed.

Trying to time the market is risky. Rates can move a quarter of a percent in a week, which on a $400,000 loan changes the payment by about $65 a month. If today's rate gives you a payment you are comfortable with, locking removes the guesswork.

Lock extensions

If your closing is delayed past your lock expiration, you can usually extend the lock for a fee, often a fraction of a point per extra day or week. Extension costs can add up quickly and are not shown on your initial Loan Estimate, so ask your lender for the extension policy up front. If a lock expires completely, you may have to accept the current market rate or the worse of the original and current pricing.

Float-down options

Some lenders offer a float-down, which lets you take advantage of a meaningful drop in rates after you lock. Float-downs usually require a minimum improvement, can be used only once and may carry a fee or a slightly higher starting rate. They are most valuable when rates are volatile and you are locking early, such as on new construction.

Changes that can affect a locked rate

A lock protects you from market movement, not from changes in your own loan. Your pricing can change if:

• The loan amount or down payment changes
• Your credit score drops after a new pull, often because of new debt
• The appraisal comes in low, changing your loan-to-value ratio
• You switch loan programs or terms
• The property type or occupancy changes, for example from primary residence to investment

Questions to ask before you lock

1. How long is the lock, and what does a longer lock cost?
2. What is the extension fee per day or week?
3. Is a float-down available, and on what terms?
4. Will you send the revised Loan Estimate showing the locked rate and points?

Comparing rates now? See today's rates or read our guide on whether to buy mortgage points.

Frequently Asked Questions

How long can you lock a mortgage rate?

Rate locks are typically available for 30, 45 or 60 days, and some lenders offer longer locks, especially for new construction. Longer locks usually cost slightly more.

Does a rate lock cost money?

Standard locks are often built into your pricing at no separate charge, but longer locks can carry a higher rate or points, and extending a lock past its expiration usually costs a fee.

What happens if rates drop after I lock?

With a standard lock you keep the locked rate. If your lender offers a float-down option, you may be able to capture part of the drop, usually once and subject to minimum improvement requirements.

Can my locked rate change?

Yes, if something about your loan changes, such as the loan amount, credit score, appraised value, loan program or occupancy. The lock protects you from market changes, not changes to the loan itself.