Rate Locks, Explained

Locking your rate feels like a formality, but it's a contract with real consequences if your timeline slips. Knowing what a lock actually guarantees — and what it doesn't — matters more than most borrowers realize until they're staring at an expiration date with a closing still two weeks out.

What a lock actually guarantees

A rate lock guarantees a specific interest rate for a specific number of days, regardless of what happens to market rates in the meantime. If rates rise after you lock, you're protected. If rates fall after you lock, you generally don't get the lower rate unless your lock includes a float-down provision.

A lock does not guarantee your loan will close, and it doesn't freeze your fees or closing costs — those can still move if your loan terms change (a different loan amount, a change in occupancy type, a credit event that changes your pricing tier).

How long locks last, and what they cost

Common lock periods run 15, 30, 45, or 60 days, with longer locks generally priced slightly worse than shorter ones — the lender is taking on more market risk the longer the commitment runs. A purchase transaction typically locks for a period matched to the expected closing date; a refinance often locks shorter since there's no seller-driven timeline to plan around.

If your closing date moves earlier than expected, you can usually close early within an active lock with no issue. If it moves later than the lock period, you're the one who pays for it — either through a lock extension fee or a full relock at current market pricing, whichever your lender offers.

Float-down options

Some lenders offer a float-down: if market rates drop meaningfully after you lock, you can request a one-time adjustment down to a lower rate before closing, usually for a fee or a slightly worse rate up front in exchange for the option. Not every lender offers this, and the ones that do usually set a minimum rate-drop threshold before it applies — a small dip in rates typically won't trigger it.

Ask specifically whether your lock includes a float-down before you lock, not after. It's a term of the lock agreement, not something you can request retroactively.

What happens if you don't close in time

• Extension fee — the most common outcome. A per-day or lump-sum charge to extend the existing rate for a set number of additional days.
• Relock at current market pricing — if the delay is long enough, or your lender doesn't offer extensions, you may be repriced at whatever the market rate is on the day you relock, which can be better or worse than your original lock.
• Worst-case scenario: a lock that expires with no extension option and a lender unwilling to relock, which can force you back into rate shopping days before closing. This is rare with a responsive lender, but it's why delays on your side — slow document turnaround, a title issue, an appraisal problem — are worth escalating the moment they appear, not after they've already eaten into your lock window.

This is general educational information, not financial, legal, or tax advice. Rules and figures change, and specifics vary by lender, loan type, credit profile, and location. Verify anything that affects a decision with your servicer, lender, or a licensed professional.