Mortgage rates can move while you are under contract. A rate lock is designed to reduce that uncertainty by holding an agreed interest rate for a defined period, subject to the lender’s terms and the loan application remaining materially unchanged.
What is a mortgage rate lock?
The Consumer Financial Protection Bureau explains that a rate lock generally means your interest rate will not change between the lock and closing as long as you close within the specified time frame and there are no changes to the application that affect pricing.
Rate locks are commonly offered for periods such as 30, 45 or 60 days, although longer periods may be available. Policies and costs vary by lender.
Where can you see whether your rate is locked?
Check the top of page 1 of your Loan Estimate. It should indicate whether the interest rate is locked and, if so, when the lock expires.
A locked rate is not an unconditional guarantee
Even after a rate is locked, pricing may change when important loan facts change. CFPB examples include changes to the loan type, down payment, appraisal, credit score or verified income.
That is one reason buyers should avoid opening new credit, missing payments or making major financial changes without discussing them with the lender first.
What happens if closing is delayed?
If the lock expires before closing, the lender may offer an extension. Extensions can involve fees or different pricing. Ask about the extension policy before the original lock is close to expiring.
What if rates fall after you lock?
A standard rate lock may protect you when market rates rise, but it may also prevent you from automatically receiving a lower rate if market rates fall. Some lenders offer float-down features, but availability, conditions and cost vary.
Questions to ask before locking
- How long is this rate lock?
- When does it expire?
- Is there a charge for this lock period?
- What would a longer lock cost?
- What happens if closing is delayed?
- What changes to my application could change the rate?
- Do you offer any float-down feature if rates fall?
Match the lock period to the transaction
A lock should be long enough to cover realistic underwriting, appraisal and closing timing. If the contract timeline is tight or the file has unresolved conditions, discuss that before selecting the shortest possible lock.
Use the Loan Estimate and Closing Disclosure together
Compare the final Closing Disclosure with the most recent Loan Estimate. If the rate or costs changed, ask for a specific explanation. The CFPB notes that rate and fee changes can be legitimate in some circumstances, but borrowers should understand why they occurred.
Coso next step
Review the mortgage and financing hub and the home-buying path to connect rate decisions with the rest of the purchase.
Educational notice: This article is general information, not a mortgage quote or individualized financial advice. Rate-lock rules and lender policies vary.