Rate Lock Explained: When and How to Lock Your Rate

You found a great rate. Should you lock it now or wait?

Here's what you need to know about rate locks — from a broker who's locked thousands of them.

What Is a Rate Lock?

A rate lock is a guarantee from your lender that your interest rate won't change between now and closing — even if market rates go up.

Think of it like a reservation. You're reserving a specific rate for a specific period (usually 30, 45, or 60 days).

Once you lock:

• Your rate is guaranteed (assuming your loan profile doesn't change)
• Your closing costs are locked in (origination fees, points, lender fees)
• You're protected from rate increases

What happens if rates go up? You keep your locked rate. You win.

What happens if rates go down? You're stuck with your locked rate (unless you have a "float down" option). You lose.

How Long Does a Rate Lock Last?

Most common lock periods:

• 30 days: Standard for quick refinances
• 45 days: Common for conventional refinances
• 60 days: Standard for FHA/VA refinances (longer processing time)
• 90+ days: Available for new construction or complex deals (costs extra)

Longer locks cost more. Lenders charge for the risk of holding your rate for 60-90 days.

Typical pricing:

• 30-day lock: Base rate
• 45-day lock: Add 0.125%
• 60-day lock: Add 0.25%
• 90-day lock: Add 0.375-0.50%

Example:

• Base rate (30-day lock): 6.25%
• 60-day lock: 6.50%

That's a $60/month difference on a $400,000 loan. Only pay for the lock period you need.

Broker's Tip: Ask your lender how long the process typically takes, then add 10-15 days as a buffer. If they say 35 days, lock for 45-50 days. Rate lock extensions are expensive.

When to Lock Your Rate

Lock immediately if:

1. You found a great rate and you're happy with it. Don't overthink it. Lock it.

2. Rates are rising. If rates jumped 0.25% yesterday and the trend is up, lock now. Don't gamble.

3. You're closing in 30-45 days. You don't have time to wait for a better rate. Lock what you have.

4. You're not a gambler. If losing sleep over rate fluctuations isn't worth a potential 0.125% savings, lock and move on.

Float (don't lock) if:

1. Rates are falling. If rates dropped 0.125% yesterday and economic data suggests more cuts coming, wait a few days.

2. You have time. If you're closing in 60+ days, you can afford to wait 1-2 weeks to see where rates go.

3. Big economic data is coming. Fed meeting in 5 days? Jobs report Friday? Wait to see how the market reacts.

4. You're okay with risk. Floating means you might get a better rate OR a worse rate. If you can handle the uncertainty, float.

My recommendation for 90% of borrowers: Lock within 3 days of applying. Bird in the hand beats gambling.

What Happens If Rates Drop After You Lock?

Bad news: You're stuck with your locked rate.

Exception: Float-down locks.

Float-Down Locks Explained

A float-down option lets you lock today, but if rates drop significantly before closing, you get the lower rate.

How it works:

• You lock at 6.25%
• Rates drop to 5.875% (0.375% drop)
• You invoke your float-down option
• You get 5.875% (or close to it — some lenders cap the drop)

Cost: Usually 0.125-0.25% added to your rate.

Float-down terms vary by lender:

• Minimum drop required: Usually 0.25-0.50% (rates must drop that much to qualify)
• One-time use only: You can't float down multiple times
• Timing restrictions: Usually only available 15-30 days before closing

Is it worth it?

Example:

• Lock at 6.25% with float-down (costs 0.125% extra)
• Your actual rate: 6.375%
• Rates drop to 5.875%
• You float down to 6.00% (lender caps the drop at 0.375%)

You end up at 6.00%, which is better than your original 6.375% but worse than the market rate of 5.875%.

Float-down makes sense if:

• You're nervous about locking
• Rates are volatile
• You can afford the 0.125% premium for peace of mind

Skip it if:

• Rates are stable
• You're confident in your locked rate
• You don't want to pay extra

Broker's Tip: Float-down is insurance. If you're the type who'll regret locking if rates drop, pay the premium. If you're disciplined and okay with your lock decision, skip it.

What Happens If You Don't Lock?

Your rate "floats" with the market.

Every day, lenders publish new rate sheets based on mortgage-backed securities (MBS) pricing. Your rate can change hourly if the bond market moves.

Example floating scenario:

• Monday: You apply. Rate is 6.25%.
• Tuesday: Jobs report comes out, unemployment is high. Rates drop to 6.00%.
• Wednesday: You lock at 6.00%.

You saved 0.25% by waiting 2 days.

Alternative scenario:

• Monday: You apply. Rate is 6.25%.
• Tuesday: Fed signals no more rate cuts. Rates jump to 6.50%.
• Wednesday: You panic and lock at 6.50%.

You lost 0.25% by waiting.

Floating is a gamble. If you guess right, you save. If you guess wrong, you lose.

Rate Lock Extensions (Expensive)

What if you don't close before your lock expires?

You have three options:

Option 1: Extend Your Lock (Pay a Fee)

Cost: 0.125-0.25% per 15-day extension

Example:

• Loan amount: $400,000
• Extension fee: 0.25% ($1,000) for 15 days

When to extend:

• Delays are out of your control (appraisal took 3 weeks, title issues, underwriting backlog)
• Current market rates are higher than your locked rate (extending is cheaper than re-locking)

Option 2: Let Your Lock Expire and Re-Lock

If current market rates are LOWER than your locked rate, let it expire and re-lock.

Example:

• Locked at 6.50% (60 days ago)
• Lock expires tomorrow
• Current market rate: 6.125%
• Let it expire, re-lock at 6.125%

You save 0.375% by not extending.

Option 3: Close Late and Lose Your Rate

If your lock expires and you don't extend, you lose your rate. You'll get whatever rate is available on closing day.

This is the worst-case scenario. Avoid it.

Broker's Tip: Build buffer into your lock period. If your lender says 40 days to close, lock for 50-60 days. Rate lock extensions are expensive.

Can You Unlock After Locking?

Technically, yes — but it's complicated.

Some lenders allow you to "break" your lock and re-lock if rates drop significantly. But:

• Not all lenders offer this
• You might pay a penalty
• You're starting the lock period over (new 30-60 days)

Most lenders do NOT allow unlocking. Once you lock, you're committed.

This is why float-down options exist — they give you flexibility without breaking your lock.

What Can Void Your Rate Lock?

Your rate lock is valid ONLY if your loan profile stays the same.

Changes that can void your lock:

1. Your credit score drops. If you apply for new credit or miss a payment, your score might drop and your rate will adjust.

2. Your employment changes. If you switch jobs or lose income, the lender might re-price your loan.

3. Your loan amount changes. If the appraisal comes in low and you need to borrow less (or more), your rate might change.

4. You add/remove a borrower. Adding your spouse? Removing your ex? That changes your debt-to-income ratio and credit profile.

5. The property type changes. If you told the lender it's your primary residence but it's actually a rental, your rate will increase.

How to protect your lock:

• Don't apply for new credit
• Don't change jobs
• Don't make large purchases (car, furniture)
• Don't deposit unexplained cash into your bank account

Broker's Tip: Lenders re-verify everything right before closing. If your credit score, employment, or financial situation changes, they'll catch it. Don't assume you're safe just because you locked.

Lock Confirmation: Get It in Writing

Always get written confirmation of your lock.

Your lock confirmation should include:

• Interest rate
• Lock period (expiration date)
• Loan amount
• Lender fees (origination, points, credits)
• Lock terms (can you extend? float down? break the lock?)

If you don't get a written lock confirmation within 24 hours, call your lender and demand it.

Some lenders "verbally lock" you but don't actually lock on their end. Then rates go up and they claim you never locked.

Get it in writing. Always.

Should You Lock on Weekends?

Lenders don't lock rates on weekends or holidays. The bond market is closed.

If you call on Saturday to lock, your lender will lock you at Monday's rate (whatever it is).

If you think rates will spike Monday (big economic data coming out, geopolitical event), you can't lock early.

If you think rates will drop Monday, wait until Tuesday to lock.

Most of the time, weekend vs weekday doesn't matter. But if you're trying to time a specific event, plan accordingly.

Frequently Asked Questions

Q: Can I lock a rate before I apply for a loan?

No. You can only lock once you have a complete loan application (property address, loan amount, income, assets). Lenders can't lock without an application.

Q: How long does it take to lock a rate?

Immediately. Once you and your lender agree to lock, it takes 30 seconds. You'll get written confirmation within 24 hours.

Q: Can I shop lenders after I lock?

Technically, yes. But if you apply with another lender, you're starting over (new application, new lock, new timeline). Only do this if you find a rate 0.5%+ better.

Q: What if the appraisal comes in low?

If the appraisal is lower than expected, your LTV changes (you have less equity). This might increase your rate. Some lenders will honor your original lock, others will re-price.

Q: Can I lock for 90 days and then close in 30 days?

Yes, but why? You'd pay for a 90-day lock (extra 0.375-0.50% in rate) but only use 30 days. Waste of money.

Next Steps

Ready to lock your refinance rate? Get personalized quotes and lock strategies:

Get your rate quote →

I'm a California licensed mortgage broker with 15+ years experience (DRE #01212512). I'll tell you exactly when to lock based on current market conditions.

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