Rate Lock
A rate lock guarantees your mortgage interest rate for a set period while your loan closes. Learn how long locks last, what they cost, how float-down options work, and what happens if your lock expires before closing.
Definition
A rate lock is a lender's commitment to hold a specific interest rate and points for a borrower for a defined period — typically 30–60 days. If rates rise during the lock period, your rate is unaffected. If rates fall, you receive the locked rate (unless you have a float-down option).
Lock period options and costs
| Lock period | Typical cost | When to use |
|---|---|---|
| 15-day lock | Free | Closing is imminent and already scheduled |
| 30-day lock | Free (standard) | Standard purchase timeline; most common |
| 45-day lock | Free or +0.125% | Slight closing delay expected; safe buffer |
| 60-day lock | +0.125–0.250% | Complex file; long underwriting queue |
| 90-day lock | +0.250–0.500% | New construction with short build time |
| 120–180-day lock | +0.500–0.750% | Long-build new construction |
| Float-down add-on | +0.250–0.500% | Volatile market; want downside protection |
The cost of not locking
Waiting 30 days in hopes of a better rate is pure market speculation. In the current rate environment, a 0.25% adverse move on a $400,000 loan costs:
A free 30-day lock eliminates this downside entirely. The only reason to float (not lock) is a strong conviction rates will fall — and even professional forecasters are wrong more than half the time on short-term rate moves.
What to do if your lock is about to expire
- Monitor your closing date starting at 15 days before lock expiration — not the day before.
- If there is a delay, contact your lender immediately. They can offer extension options before the lock expires; options narrow once it has.
- Ask whether the delay is the lender's fault — processor backlogs, appraisal delays ordered by the lender, or underwriting turnaround may qualify you for a free extension.
- If rates have fallen since you locked, a re-lock at expiry may actually benefit you — but only if the rate differential exceeds any re-lock fee.
Common questions
When should I lock my mortgage rate?
Lock as soon as you have an accepted purchase contract and you are comfortable with the rate. Waiting to get a better rate is market timing — professional traders cannot reliably predict short-term rate moves, and mortgage rates can move 0.25–0.50% in a single week on a strong jobs report or Fed statement. The cost of a lock (usually free for 30–45 days) is negligible compared to the risk of a 0.25% rate increase on a $400,000 loan ($67/month × 30 years = ~$24,000 extra interest).
What happens if my rate lock expires before closing?
If your lock expires before closing, you face three options: (1) Lock extension — the lender extends your lock for additional days, typically charging 0.125–0.375% of loan amount per 15-day extension. (2) Re-lock at current market — if rates have fallen, this is beneficial; if risen, you pay more. (3) The lender's goodwill — if the delay was the lender's fault (underwriting backlogs), they may extend at no charge. Get lock expiration dates in writing and monitor the closing timeline starting at 15 days out.
What is a float-down option?
A float-down is an add-on to a rate lock that allows you to capture a lower rate if rates fall during the lock period, while still being protected if rates rise. It is not free — expect to pay 0.25–0.50% of the loan amount upfront or a slightly higher rate. Float-downs typically have a trigger: rates must fall by at least 0.25–0.50% before you can exercise. For a $400,000 loan, a float-down add-on costs $1,000–$2,000. Worth considering in highly volatile rate environments or when you believe rates are more likely to fall than rise.
Can I lock a rate without a purchase contract?
Most lenders require a signed purchase contract and property address before issuing a standard rate lock. However, some lenders offer extended lock programs (60–120 days) for buyers who are pre-approved but still searching — at a premium of 0.25–0.50% added to the rate. New construction purchases can also use "extended locks" covering the build period (6–18 months), though pricing is higher. For a resale purchase, the standard process is: get pre-approved (no lock), go under contract, then lock.
Does the rate lock guarantee closing costs too?
A rate lock guarantees the interest rate and usually the loan points quoted. It does not guarantee all closing costs — third-party fees (appraisal, title, attorney) can change. The CFPB's Loan Estimate and Closing Disclosure rules limit how much certain fees can change between estimate and closing. Lender fees (origination, application) generally cannot increase. Third-party fees can increase by up to 10% in aggregate. Fees paid to providers the lender selects (appraisal) can increase only if there is a "valid changed circumstance."