Mortgage rates move daily, sometimes sharply. A rate lock is your lender's commitment to hold a specific rate for a defined period while your loan is processed, so that a move in the market between application and closing doesn't change what you agreed to.
It sounds administrative. It isn't — the lock decision can be worth more than the rate shopping that preceded it, and a lock that expires at the wrong moment is genuinely expensive.
What a lock actually commits
A lock fixes your interest rate, and typically the associated points, for a set number of days — commonly offered in increments of roughly 30, 45, or 60 days, sometimes longer.
Two things to understand about what it doesn't do. First, a lock is not loan approval; your file still has to clear underwriting, and the property still has to appraise. Second, the lock is tied to the loan as described. Material changes — a different property, a different loan amount, a different programme, or a change in your credit profile — can invalidate it or trigger re-pricing.
So a lock protects you against the market moving. It does not protect you against your own application changing.
Match the lock period to reality
This is the practical decision. Longer locks cost more — either as an explicit fee or, more often, priced into a slightly higher rate — because the lender is carrying the risk for longer.
The instinct is to take the cheapest, shortest lock. That's a mistake if your timeline is uncertain, because the cost of extending a lock generally exceeds what the longer lock would have cost upfront.
Ask your loan officer for a realistic estimate of days to close given current volumes, then add buffer for the things that habitually slip: appraisal scheduling, title work, and a seller who needs an extra week. Choose a lock that covers the realistic case, not the optimistic one.
New construction deserves special mention. Build timelines slip routinely, and a standard lock is often inadequate. Extended locks exist specifically for this, and they cost real money — factor it into the decision to buy new rather than discovering it later.
When a lock expires
If your lock expires before closing you generally face one of three outcomes, none good:
- Pay to extend. Usually priced per day or as a fee. The common resolution.
- Re-lock at current market rates. Fine if rates fell; painful if they rose.
- Worst case, "worst-case pricing" — some lenders re-lock at the higher of your original rate or the current market, which removes any upside.
Ask two questions before you lock: what does an extension cost per day, and what is your policy if the lock expires? The answers vary meaningfully between lenders and are rarely volunteered.
Float-down options
A float-down lets you lock a rate but capture a lower one if the market improves before closing. It's insurance against locking at the wrong moment.
The terms matter more than the concept. Typically there's a cost, either upfront or in pricing; the rate usually has to fall by a defined minimum before it triggers; it can often only be exercised once; and there's a window in which you must use it. A float-down requiring a large move that never materialises is money spent for nothing.
Reasonable when you're locking a long period during a volatile stretch and would genuinely regret missing a fall. Less compelling on a short lock in a quiet market. Get the trigger threshold and the cost in writing and decide on the arithmetic.
Should you lock now or float?
Floating means declining to lock, betting rates improve. Be honest about what that is: a directional bet on interest rates, made by someone who almost certainly has no edge in predicting them. Professional forecasts are unreliable; yours will not be better.
A more useful frame is asymmetry of consequences. If rates rise and you're unlocked, does the deal still work? If a rise would break your budget or push your debt-to-income ratio past qualifying, lock — the downside is not symmetrical with the upside, so the small potential gain isn't worth it.
If you have genuine headroom and could absorb a rise without difficulty, floating is a defensible risk. Most buyers, especially first-time buyers near the edge of affordability, should lock and stop watching rates.
Locks and rate shopping
Do your comparison before locking, not after. Once locked with one lender, switching means starting over — new application, new appraisal fee in many cases, new timeline. The practical effect is that locking finalises your lender choice.
Concentrate applications into a short window so credit inquiries count as one event, compare Loan Estimates side by side, and only then lock with your chosen lender. See pre-qualification vs pre-approval for how the application stages work and credit score and your rate for what determines the number you're locking.
Get it in writing
A verbal lock is not a lock. Get written confirmation stating the rate, the points, the expiry date, and the loan terms it applies to. Verbal misunderstandings about locks are a recurring source of disputes, and the party without documentation loses.
Diary the expiry date yourself rather than relying on anyone else to flag it, and check in a week or two before if the process is dragging. An extension arranged in advance is usually cheaper and calmer than one negotiated on the day it lapses.
The bottom line
Lock when the deal only works at or near the current rate, and choose a lock period matching a realistic closing timeline rather than an optimistic one — extensions typically cost more than the longer lock would have.
Ask what extensions cost and what happens on expiry before committing. Consider a float-down only if the trigger and price make sense on the numbers. And get every lock in writing, with the expiry date in your own calendar.