Loan Products · April 20, 2025
What Is a Rate Lock and When Should You Lock Your Mortgage Rate?
A rate lock protects you from rising rates between application and closing. Here is how rate locks work, how long to lock, and what happens if your closing is delayed.
From application to closing, interest rates can and do change. A rate lock protects you from that volatility.
What Is a Rate Lock
A commitment from a lender to hold a specific interest rate for a defined period — typically 15, 30, 45, or 60 days. If market rates rise during that period, your locked rate is protected. If rates fall, you are locked in at the higher rate (float-down options can address this).
When to Lock
At application (safest), after inspection and appraisal (reduces risk window), when you are satisfied with the rate (do not try to time the market perfectly), or when market signals suggest rates are moving higher.
Rate Lock Duration and Cost
Longer locks cost more. Typical pricing: 15-day lock is cheapest, 30-day lock has a small premium, 45-day lock has a moderate premium, 60-day lock typically adds 0.125-0.25% to the rate or an equivalent fee.
Match your lock period to your realistic closing timeline with a few days buffer.
Float-Down Options
If rates drop by more than a specified amount after you lock, a float-down provision lets you drop to the lower rate. Typically costs 0.25-0.50% upfront. Worth considering in volatile markets.
What Happens If You Miss the Lock Deadline
Lock extension costs typically run 0.125-0.25% for each 30-day extension. Always build a buffer — if your target close is June 30, do not lock a 30-day lock on June 1.
HMS helps every borrower time their lock strategically. Call 309-222-8286.