Interest Rate Lock
An interest rate lock is a lender's commitment to hold a specific interest rate for a defined period (typically 30–60 days) while your loan processes, protecting you from rate increases during underwriting. Rate locks are typically free for standard periods; longer locks (60–90 days) may cost 0.125–0.5% of the loan amount. Locks expire if you don't close by the deadline.
When you submit a mortgage application, the rate quoted is not guaranteed until you formally lock it. When you lock with a direct lender, the commitment is made by the same institution that will fund your loan, giving you a single point of accountability. Between application and closing — typically 30–45 days — rates can move significantly. Locking in protects you from those increases, but if rates fall after you lock, you're generally stuck with the higher locked rate (unless your lender offers a float-down option).
Timing your lock is a judgment call. Locking too early risks the lock expiring before you close (requiring a costly lock extension fee of 0.125–0.5% per week). Locking too late risks a rate spike before you close. Most buyers lock when the purchase contract is signed and they have a reasonable closing timeline in sight.
A float-down provision (typically costs 0.5% upfront) allows you to lower your locked rate if market rates fall by a specified amount before closing — usually 0.25–0.5%. It provides insurance in both directions: if rates rise, you're protected; if they fall significantly, you can capture the lower rate.
Key Takeaway
An interest rate lock is a lender's commitment to hold a specific interest rate for a defined period (typically 30–60 days) while your loan processes, protecting you from rate increases during underwriting. Rate locks are typically free for standard periods; longer locks (60–90 days) may cost 0.125–0.5% of the loan amount. Locks expire if you don't close by the deadline.
Related Terms
Frequently Asked Questions
Standard locks are 30–45 days. Locks of 60–90 days are available but cost more. Some lenders offer extended locks of 120–180 days for new construction.
You'll need to pay a lock extension fee (typically 0.125–0.5% of the loan) or accept whatever the current market rate is — which could be higher.
Not without a float-down option. Standard locks prevent rate increases but don't allow you to benefit from decreases. A float-down provision (for a fee) gives you the ability to lower a locked rate if rates fall enough.
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