Mortgage Rate Locks Explained: Answers to 11 Common Questions

When you apply for a mortgage loan, the lender will offer you a specific mortgage rate. This rate determines how much interest you’ll pay over the life of the loan. It also affects the size of your monthly payments, because interest is one of the main components of those payments.

You might also have the opportunity to “lock in” your mortgage rate, to protect you from rate increases while your mortgage loan is being processed.

But what does it mean to lock in a mortgage rate? When is it a good idea? And how long does the rate stay “locked” if you choose this option?

At a glance: A mortgage rate lock means that the interest rate assigned to your loan won’t change between the initial offer and the final closing, as long as you close within the specified time frame and without any major changes to your qualifications.

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1. What does it mean to “lock in” a mortgage rate?

Locking in a mortgage rate means that you are securing a specific interest rate on your home loan for a specific period of time, usually 30 to 60 days. This protects you from potential interest rate increases during the period between your initial rate offer and closing on your home.

During the lock-in period, the mortgage rate that the lender offered to you will stay the same, despite any market fluctuations. It’s almost as if the rate has been “frozen in time,” even though the rest of the mortgage process is moving forward.

2. Why should I consider doing it?

You don’t have to lock in your mortgage rate during the loan process. It’s usually optional, and not all borrowers choose this strategy. Some choose to “float” the rate instead, leaving it “unlocked” with hopes that interest rates will decline prior to closing thus saving them money.

So why should you consider it? Two reasons: for peace of mind and budgeting.

Mortgage rates change constantly. So there’s a chance they could increase by the time you reach the final closing stage. Locking in your rate shields you from this and provides peace of mind. It can also help you budget accurately during the home buying process.

3. Does it guarantee that my loan will be approved?

Locking in a mortgage rate does not guarantee loan approval. It only secures the offered interest rate for a specified period of time. You must still meet all other loan requirements set forth by your lender, as well as any official requirements from the FHA, VA, Freddie Mac, etc.

4. When is the best time to lock in a mortgage rate?

There is no one-size-fits-all answer to this question. But it’s usually wise to lock in the rate when you’re confident that you can close on your home within the specified lock period.

The process usually works like this:

• Pre-approval: You submit your loan application and financial documents and get pre-approved for a certain loan amount with an estimated interest rate.
• House hunting: You shop for a home and eventually sign a contract with the seller.
• Rate lock: You tell your mortgage broker or loan officer that you want to lock in an interest rate. They’ll present you with different options and you’ll agree to the terms and probably pay a fee.
• Mortgage processing: The lender reviews the loan documents, has the home appraised, and evaluates your application for final approval. This typically happens within the lock period.
• Approval and Closing: The lender issues a final loan approval with the locked-in interest rate (assuming your qualifications haven’t changed). You close on the home and get your keys.

In most cases, it’s best to lock in the mortgage rate when you are sure you’ll be proceeding with the loan and the home purchase. This usually occurs after the seller accepts your offer and your loan moves into the next phases of the review process.

On the other hand, if you anticipate delays in closing due to factors outside your control, you might choose to wait a bit to lock in your rate. Similarly, if you’re just starting to look at houses, you might want to hold off on the rate lock to avoid feeling rushed during house hunting.

If you think interest rates might fall between the time you apply for the loan and close on the home, you could postpone the rate lock. But you have to remember that mortgage rates could also rise during that timeframe. No one can predict future trends with 100% accuracy.

5. How long can I lock it in for?

The length of the lock-in period can vary depending on your lender and the type of loan you are using. It usually ranges from 30 to 60 days, but it can be shorter or longer in some cases.

Mortgage lenders often charge additional fees for a longer lock-in period. That’s because the lender is taking on more risk by guaranteeing a specific interest rate for an extended timeframe. They’re missing out on the opportunity to lend at higher rates if the market shifts in that direction. This represents an “opportunity cost” for the lender, so they charge accordingly.

6. Can the rate lock period be extended?

Your lender might give you the option to extend your rate lock if you need more time to close the loan. But this usually requires an additional fee that can vary based on the length of the extension. Ask your lender about their extension policies in advance.

7. Do all lenders charge a fee for this?

Not all lenders charge a fee for this service. Some lenders offer free rate locks, especially for shorter periods like 30 or 45 days. But many of them do charge a fee.

If there is a cost, it could either be incorporated into the interest rate or charged as a separate fee. But this can vary from one lender to the next, so you’ll want to ask about it in advance. 

8. What if I don’t close within the specified timeframe?

As mentioned above, mortgage rate locks are set for a specific length of time (30 days, 45 days, etc.). If you aren’t able to close on your home within that timeframe, you’ll probably have to do one of two things:

• Pay an extension fee to keep the same rate, or…
• Lock in a new rate at current market levels, which could be higher or lower.

The best-case scenario is to coordinate and communicate with your mortgage lender, to avoid reaching the expiration date.

9. Are there any downsides or disadvantages?

The main downside is that if interest rates fall after you lock in, you’ll miss out on the lower rate (and the resulting savings). Also, locking in too early in the mortgage process could tie you to a rate that might not be the best available by the time you actually close.

10. Can I change my mortgage rate after locking it in?

In most cases, you cannot change your mortgage rate after locking it in. That would defeat the whole purpose of this agreement.

The lock represents a commitment between you and the lender. It basically works like a short-term contract. It guarantees you a specific mortgage rate for a specific period of time. It offers protection from rising interest rates but also prevents you from making changes if rates fall.

But depending on the scenario, there might be some workarounds:

• Float-down option: Some lenders offer a “float-down” option with greater flexibility. It allows you to take advantage of lower interest rates if they decline after your initial lock-in. You would probably have to pay an additional fee for this option, if it’s even available.
• Start over with a new lender: You could switch lenders and start a new lock agreement if you find a significantly better rate elsewhere. Just know that you’ll have to start the application process all over again from scratch, which might delay your closing.

You should also know that a lender could still change your rate—or even void the lock altogether—if your qualifications were to change significantly.

For example, if you take on additional debt or experience a partial loss of income, it could violate the terms of your initial lock-in agreement and allow the lender to alter your interest rate.

11. What does it mean to float the rate?

A rate float means that you choose not to lock in your interest rate and instead allow it to fluctuate with market conditions.

This can be a risky strategy, because there’s always a possibility that mortgage rates will rise during the loan process. But it could also save you money if they were to drop.

Floating is generally not recommended unless you have flexibility in your closing timeline and are comfortable with the added uncertainty.

• If you prefer certainty and want to avoid the risk of rising rates, locking in is usually the safer choice.
• If you have a flexible timeline and are willing to gamble on potentially lower rates, floating could be an option.

Also bear in mind that weekly changes in mortgage rates can be quite small, sometimes just a few basis points. (One basis point equals one hundredth of a percentage point.) Significant changes usually occur over months.

So even if rates do change during your lock period, it might not affect you very much in the grand scheme of things.

Disclaimer: Every mortgage lending scenario is different because every borrower is unique. As a result, portions of this article might not apply to your situation. These FAQs are provided for educational purposes and do not constitute financial advice.