A rate lock is a lender’s commitment to hold a specific interest rate for a set period, usually 30, 45, or 60 days, while the loan moves toward closing. Once locked, the rate will not rise even if market rates increase. If rates fall, most standard locks do not automatically give you the lower rate unless the lender offers a float-down option (often for an extra fee).
Deciding when to lock involves balancing risk and opportunity. If rates have been trending higher or economic news suggests further increases, locking sooner protects the payment you have budgeted. If rates appear likely to drop and your closing is still weeks away, some borrowers choose to float. The safer approach for most buyers is to lock once the purchase contract is signed and the closing date is reasonably firm.
Longer locks cost more in the form of a slightly higher rate or an upfront fee. If the closing is delayed beyond the lock period, an extension fee usually applies. Communicate early with your loan officer about the expected timeline so the lock length matches reality. Keep the mortgage calculator handy to see how a quarter-point rate difference affects the payment—this helps decide whether paying for a longer lock or a float-down is worthwhile.
Never assume a quoted rate is locked until you receive written confirmation. Market rates can move several times in a single day. Once the lock is confirmed, focus on completing underwriting conditions promptly so the loan closes inside the lock window and the rate you planned on is the rate you receive.