How to Lock In a Mortgage Rate (and When to Float)

A rate lock is a written commitment from the lender that holds your interest rate for a set period, even if market rates rise before you close. It's one of the most important (and most misunderstood) parts of the mortgage process.

What a Rate Lock Actually Does

When you lock, the lender commits to a specific rate, fee structure, and (usually) APR for a defined window, typically 15, 30, 45, or 60 days. If market rates go up before closing, you keep your locked rate. If they go down, you're stuck with what you locked (unless you negotiate a float-down).

When to Lock

Lock when (a) you have an accepted purchase contract or have decided to refinance, (b) rates are currently at a level you're happy with, and (c) the market is stable or trending up.

On a purchase, the safest play is to lock right after your offer is accepted. The seller has already signed; you have a closing date; the math is clear. On a refinance, lock when the rate hits your target, don't try to time the absolute bottom.

When Floating Makes Sense

Floating means choosing not to lock yet, betting that rates will drop. It only makes sense if (a) the market is clearly trending lower, (b) you have time before you need to close, and (c) you can stomach the downside if you guess wrong.

For most borrowers, the downside risk of floating is bigger than the upside. The peace of mind from a locked rate usually outweighs the chance of saving a few basis points.

Lock Periods and Cost

Longer locks cost slightly more in pricing. A 60-day lock will cost more than a 30-day lock, usually a fraction of a percent in rate or a small cost in fees. Match the lock period to your closing timeline plus a small buffer.

What Happens If Rates Drop

Many lenders offer a one-time float-down option, where you can re-lock at a lower rate if the market drops significantly before closing. There's usually a fee or a minimum rate movement required. Ask about it upfront if rate movement is a concern.

Lock Extensions and Expirations

If your loan can't close before the lock expires, you'll need a lock extension (usually a fee per day) or you'll have to re-lock at current market rates. Stay in close contact with your loan officer to avoid surprise expiration costs.