How to Lock in a Mortgage Rate (and When You Should Do It)
When you’re shopping for a home loan, there’s one decision that can have a lasting impact on your monthly payments—and that’s locking in your mortgage rate. It’s one of those terms that gets thrown around a lot in the mortgage process, but many borrowers aren’t totally sure how it works, or when the timing makes the most sense. The good news? You don’t need to be a market expert to make the right call. But you do need to understand what a rate lock is, how it protects you, and why timing really matters.
At its core, locking in a mortgage rate means securing the interest rate offered by your lender for a specific period of time, usually anywhere from 30 to 60 days. During that window, even if rates go up, your locked-in rate stays the same. That means more predictability as you move toward closing—and peace of mind if you’re worried about rate fluctuations. But rate locks aren’t indefinite, and they’re not free in every case. So the “when” matters just as much as the “how.”
Let’s start with how rate locks work. Once you’ve applied for a loan and your application has been pre-approved or conditionally approved, your lender may give you the option to lock your rate. You’ll be quoted a rate based on your credit profile, the loan type, and current market conditions. If you choose to lock it, that rate is yours for the duration of the lock period, even if broader interest rates shift in the meantime. If rates climb while you’re under contract, you’ve essentially protected yourself. If rates drop, you might feel like you missed out—but that’s the tradeoff for certainty.
That leads us to one of the biggest misconceptions about rate locks: that you should always wait until the lowest possible rate appears. In reality, trying to time the bottom of the market is tricky even for professionals. Mortgage rates can move daily—sometimes hourly—based on economic news, inflation data, or statements from the Federal Reserve. If you’re floating your rate (meaning it’s not yet locked), you’re exposed to those swings. Sometimes that can work in your favor, but it can just as easily cost you more in the long run.
So when should you actually lock in your rate? The short answer: once you’re under contract on a home and have a clear timeline to close. That’s when things start moving quickly, and rate certainty becomes more important. If you’re still house hunting, locking a rate too early doesn’t make sense—unless your lender offers a longer-term lock with a float-down option (more on that in a minute). For most buyers, the sweet spot is right after your offer is accepted, your loan file is moving through underwriting, and your closing date is in sight. At that point, locking your rate helps eliminate one more variable from the equation.
There are also strategic reasons to lock earlier or later depending on what the market is doing. For instance, if economic indicators suggest rates are about to rise, it might make sense to lock in as soon as you’re able, even if you’re a few weeks out from closing. On the other hand, if rates have been stable or are trending downward, some borrowers choose to float a little longer—just be aware that this comes with risk. If rates rise suddenly, you may have to lock at a higher rate, which could impact your monthly payment or your overall budget.
Now, what about those float-down options? Some lenders offer locks that allow you to take advantage of lower rates if they drop during your lock period. It’s not something every lender provides, and there’s often a fee or specific criteria that must be met—like a significant enough rate drop or approval from underwriting. If that kind of flexibility matters to you, it’s worth asking your loan officer what options exist. A float-down can be a great middle ground between locking for protection and keeping a little room to benefit from favorable shifts in the market.
Another factor to consider is the length of your rate lock. Standard locks are 30 or 45 days, which works for most purchase transactions. But if you’re dealing with new construction or any scenario where your closing might be further out, you may need a longer lock. Just know that longer lock periods typically come with slightly higher rates or added fees. If you end up needing to extend a lock beyond its original expiration, there may be an extension cost—and that can vary depending on your lender and how far rates have moved since your original lock.
It’s also important to understand that once you’ve locked your rate, you’re not guaranteed that specific loan until you complete the full process. If something changes with your credit, your employment, or the property itself, the terms of your loan could change, and the rate could be re-evaluated. Staying in close contact with a licensed mortgage loan originator throughout the process is key. They can help you understand the timing, the risks, and whether locking now—or waiting—makes more sense based on your individual situation.
In many cases, the decision to lock is less about squeezing every last drop of savings from the market and more about ensuring stability in your loan. If a slightly lower rate does come along later, the difference in monthly payment may only be a few dollars. But the peace of mind that comes with knowing your rate (and your budget) won’t change between now and closing can be worth far more. That’s especially true in markets where affordability is tight and every dollar counts toward qualifying.
Ultimately, locking in a mortgage rate is a key milestone in the loan process, and it’s one that deserves some thought. You don’t need to stress about perfect timing, but you should be aware of your options and make the choice that lines up with your financial goals. Partnering with an experienced lender who can explain the implications clearly—and walk you through the timing—can make the decision a lot easier.
If you’re getting ready to buy and want help understanding your mortgage options, our team of licensed mortgage loan originators is here to answer questions, explain the details, and guide you through every step.
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