Mortgage Rate Lock Strategy: When and How to Lock Your Rate

A rate lock guarantees your mortgage interest rate for a set period — protecting you from rate increases while your loan processes. Getting the timing right can save or cost you thousands. Here's how to navigate rate locks in today's volatile rate environment.

How Rate Locks Work

When you lock a rate, the lender commits to that rate for a specified period (typically 30, 45, or 60 days) regardless of market movements. If rates rise after you lock, you're protected. If rates fall, you're stuck — unless you have a float-down option.

Lock Period Options and Costs

• 15-day lock: Cheapest (or free), but very tight timeline
• 30-day lock: Standard for purchase loans, usually free or minimal cost
• 45-day lock: Small premium, common when closing is uncertain
• 60-day lock: Typically 0.125–0.25% of loan amount extra
• 90-day lock: For new construction — costs 0.25–0.5% extra
• Extended locks (180+ days): Available but expensive — 0.5–1%+

Float-Down Options

A float-down option lets you benefit if rates drop significantly after locking. You pay a small fee upfront (typically 0.125–0.5% of loan), and if the market rate drops by a specified amount (usually 0.25–0.5%), your locked rate drops with it. Worth considering in a declining rate environment.

What Happens If Your Lock Expires

• If rates are lower: Lender re-locks at the new lower rate (good for you)
• If rates are higher: You pay an extension fee (typically 0.125–0.375% per additional 15 days)
• Ask about free extension policies — some lenders offer 1 free extension if delays are their fault