Rate Locking: How and When to Lock Your Mortgage Rate

Your interest rate isn't set in stone until you lock it, and knowing how and when to lock can save you real money. Rates move constantly, so understanding your options up front helps you make a confident decision instead of a rushed one. Here's what every borrower should know.

Shorter Locks Get Better Rates

Rate locks come in different lengths, and the length affects your rate. As a rule, a 30-day lock prices better than a 60-day, a 60-day prices better than a 90-day, and so on. The longer you ask the lender to hold a rate, the more that protection costs you in the form of a slightly higher rate. So it pays to lock for the shortest window that still comfortably covers your closing timeline.

Lock a Few Days Past Your Close Date

The market moves every single day. Rates change daily, and sometimes several times within the same day. Because of that, you want your lock to extend a few days beyond your expected closing date to give yourself a cushion. If your close gets pushed back and your lock expires, an extension can get expensive. Building in a small buffer up front is far cheaper than paying to extend later.

Long-Term Locks Have a Cost

Long-term locks are available if you need one, but the rates are much higher to account for the extended risk the lender is taking on. In a downward-trending or flat market, a long lock often isn't a good option. You'd be paying a premium to protect against a move that may not happen, and you could miss out if rates drift lower. Long locks make the most sense in specific situations, so it's worth talking through whether one actually fits yours.

Locking Is Free

There's no fee to lock a rate. Locking simply secures your pricing for the agreed window. You don't pay extra to hit the lock button, so cost shouldn't be what holds you back from locking when the timing is right.

Float-Down Options

Some rate locks include a float-down option, which lets you capture a lower rate if the market drops after you lock. The catch is that these typically only kick in with a significant rate drop, usually more than 0.25%. A float-down can be valuable, but it's not designed to catch every small dip, so understand the terms before counting on it.

You Tell Us When to Lock

This is the most important part: you need to let us know when you want to lock. With rates moving daily, sometimes multiple times a day, it isn't possible to notify every client every time the market shifts. The decision to lock is yours, and it starts with you giving us the go-ahead.

That said, you don't have to watch the market alone:

• If you have a target rate, tell us, and we can help monitor for it.
• We watch the bond market for insight on where rates may head within the next 24 hours. Beyond that short window, though, it's anyone's guess. No one can reliably predict rates further out.

The Safest Move

When it comes down to it, locking as soon as you're comfortable, sooner rather than later, is usually the safest move. Trying to time the bottom of the market is a gamble, and a rate you're happy with today is worth more than one you're hoping for tomorrow. Lock in certainty when the numbers work for you.

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Not sure whether to lock now or wait? Let's talk through your timeline and your target rate, and I'll help you make the call with the full picture in front of you. If you're still early in the process, start with how buying works.