Should You Lock Your Mortgage Rate?

Locking in Your Mortgage Rate: What You Need to Know

Interest rates on mortgage loans can be unpredictable—they might fluctuate multiple times during your application and closing process.
To avoid uncertainty and preserve your ideal rate, ask your lender about locking it in.

What Does It Mean to Lock in Your Mortgage Rate?

When getting a mortgage loan, your lender will ask if you want to “lock” your interest rate for a set period or “float” it until closing.

Locking your mortgage rate means it won’t change—as long as your loan closes before the lock expires.
If you don’t lock it immediately, your lender may offer a window to do so later.

Once you find the rate you want, lock it in ASAP—there’s no guarantee rates won’t rise.

Buying or refinancing? Let’s make sure you get the best interest rates!

What Happens if I Don’t Lock in My Mortgage Rate?

If rates rise and you haven’t locked in:

• You may need to pay more upfront at closing
• Or make a larger down payment
• Or accept a higher monthly mortgage payment

How Mortgage Rate Locks Work

Mortgage rate locks help shield you from rising interest rates while your loan is being processed. They typically last at least 30 days, giving lenders time to finalize the paperwork.

If your loan isn’t ready when the lock expires, you may have to renegotiate or accept a new rate.

Note: If rates drop during your lock-in period, you typically can’t take advantage of the lower rate unless your loan has a “float down” clause.

Reasons Your Locked Rate Might Still Change

Even with a rate lock, your interest rate may still change if:

• Your down payment amount changes
• The home appraisal value is lower than expected
• Your credit score drops
• Your income can’t be verified

Your lock agreement should include:

• The interest rate
• Loan type
• Lock expiration date
  (Always get this in writing.)

Related: 580 Credit Score Home Loans

What If Interest Rates Drop After I Lock?

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You can withdraw your application and start over, but consider these risks:

• You may lose money on appraisals or credit checks
• New applications may have higher processing fees
• Delays could jeopardize the closing date, especially if the seller has a deadline

Still, if the rate drop is significant, restarting might save you thousands long-term.

When Can You Lock Your Mortgage Rate?

Most borrowers lock their rate once they accept a lender’s offer.

If you like the current rate and worry it may rise, lock it in immediately. If you think rates may fall, ask your lender if you can wait or delay the lock.

How Long Do Rate Locks Last?

Rate locks typically last 30–60 days.

Work with your lender to choose the appropriate length based on how long it will take to close.

If delays occur, you may need to pay for a rate lock extension, or the lender may cover it.

Mortgage Rate Float Down

A “float down” lets you take advantage of lower rates during your lock period.

Not all lenders offer float-down options, and there may be:

• Fees involved
• Strict criteria to qualify

Ask your lender about their float-down policy before you lock in.

Related: Mortgage Modification Options

How Much Does It Cost to Lock Rates?

Most rate locks are free, but some lenders charge a small fee—especially for longer lock periods.
The cost is typically minor compared to the savings of avoiding a rate increase.

Mortgage Rate Lock Pros and Cons

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Pros:

• You keep a great rate until your loan closes
• Your future payments won’t be affected by market changes
• You avoid last-minute rate hikes that might require a higher down payment or buying discount points

Cons:

• You could miss out on lower rates
• If your rate lock expires, you might have to pay for an extension

Related: Benefits of Buying a Home

Looking for the best rates for your mortgage loan?
Get in touch with the loan brothers at Mares Mortgage!

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