The interest rate a lender quotes you today is not the rate you are guaranteed at closing, which might be weeks away. Rates move daily with the bond market, and without protection you are exposed to wherever they happen to land on your closing date. A rate lock is that protection: the lender's written commitment to hold a specific rate for a specific number of days, regardless of what the market does in between.
It sounds purely like a benefit, and mostly it is — but a lock has two edges. It protects you if rates rise, and it also binds you if rates fall. And it comes with a deadline that, if missed, costs real money.
What a rate lock is
When you lock, the lender freezes your rate (and usually the points and lender credits attached to it) for the lock period. If market rates climb before closing, you keep your lower locked rate. If they fall, you are generally stuck with what you locked — unless you paid for a float-down option, below.
A lock is normally free to place in the sense that the rate you are offered already includes the cost of the lender bearing that risk for a standard period. The cost shows up when you want the lock to last longer than standard, or when you need to extend it.
Lock periods: longer costs more
Locks come in periods — commonly 30, 45, or 60 days, sometimes longer. The longer the lock, the more it costs the lender to guarantee, and that cost is passed to you as a slightly higher rate or in points.
The trap is locking for 30 days to get the best price when your purchase realistically needs 45. If you then have to extend, the extension fee usually wipes out what you saved. Ask your loan officer what closing timeline is realistic for your transaction, and lock for that plus a little.
When to lock
Timing a lock is partly judgment, but a few principles hold:
- You generally need a property and an accepted offer to lock a purchase. Until the loan is tied to a specific address and price, most lenders will only quote, not lock.
- Lock when the rate makes your deal work and you are comfortable. Trying to catch the exact bottom is a losing game — nobody, including your lender, knows where rates go next. If a locked rate makes your payment affordable, the certainty is usually worth more than the gamble of waiting for a slightly better number.
- Mind the closing date. Lock for a period that comfortably covers your expected closing, because the downside of a lock expiring is concrete and immediate.
When the lock expires: extensions
If your closing slips past the lock's expiry — a slow appraisal, a title snag, a delayed seller — you face a lock extension, and extensions are not free.
If the delay was the lender's fault, you can and should ask them to absorb the extension. If it was outside anyone's control, the fee is usually yours. Either way, the lesson is to lock with a realistic cushion so you never need the extension in the first place.
Float-downs: an option with a price
A float-down is a feature some lenders offer that lets you take a lower rate if the market drops after you lock, while still keeping your protection if it rises. It sounds like the best of both worlds, and in a sense it is — but it is not free. A float-down is typically paid for with a slightly higher starting rate or a fee, and it usually only triggers if rates fall by more than a set threshold.
Whether it is worth it is a small bet on volatility. If you are locking a long way out and rates seem likely to fall, a float-down can pay off. If you are locking close to closing, or the fee is steep, it often is not. Read the exact terms: how big a drop triggers it, how many times you can use it, and what it costs up front.
Lock after you shop, not before
One sequencing point that saves money: compare lenders first, then lock. A lock ties you to one lender, so locking early forecloses your ability to shop the rest. Gather Loan Estimates from several lenders, compare them properly, choose, and then lock with the winner.
The credit-score worry that stops people from shopping is largely unfounded: multiple mortgage inquiries within the rate-shopping window count as a single inquiry, so getting quotes from several lenders barely moves your score. The mechanics of that window are covered in pre-approval vs. pre-qualification. Shop, then lock — not the other way around.
Frequently asked questions
What is a mortgage rate lock?
A lender's written commitment to hold a specific interest rate (and its associated points) for a set number of days while your loan closes. If market rates rise before closing, you keep your locked rate; if they fall, you are generally stuck with it unless you bought a float-down option.
How long should I lock my rate for?
For the time you realistically need to close, plus a small cushion — commonly 30 to 60 days for a purchase. Locking for too short a period to get a lower price backfires if you then have to pay an extension fee, which usually costs more than the longer lock would have.
What does it cost to extend a rate lock?
Typically a fraction of the loan amount per extension period — often in the range of 0.125% to 0.375%, so a few hundred to over a thousand dollars on a $400,000 loan. If the delay was the lender's fault, ask them to cover it; if it was outside anyone's control, the fee is usually yours.
Should I lock my rate or wait for it to drop?
If a locked rate makes your payment work and you are comfortable, lock — trying to time the exact bottom is a gamble even lenders can't win. If you are locking well ahead of closing and expect rates to fall, a paid float-down option can let you capture a drop while keeping your protection.
Should I lock before or after comparing lenders?
After. A lock ties you to one lender, so locking early prevents you from shopping the rest. Gather Loan Estimates from several lenders, compare, choose, then lock. Multiple mortgage credit checks in the rate-shopping window count as one inquiry, so shopping first barely affects your score.
Mortgage Ledger publishes educational information, not personalized financial, legal, tax, lending, or investment advice. The figures here are estimates built on stated assumptions and will not match a lender’s underwriting exactly. Confirm any number that matters against your Loan Estimate and a licensed professional before you act on it.