How a Mortgage Rate Lock Works, and When a Longer Lock Matters

Mortgage rates can change daily. Between the day you apply and the day you close, the market can move in either direction. A rate lock is how you take that uncertainty off the table.

What a rate lock is

A rate lock is a commitment to hold a specific interest rate and pricing for your loan for a set period of time, as long as the loan closes within that window and the details of the loan stay the same.

If rates rise while you are locked, your rate does not change. If rates fall, a standard lock generally keeps you at the rate you locked. That is why some borrowers ask about float-down options, covered below.

A lock applies to a specific loan scenario. The pricing is based on details such as:

• Loan program and term
• Loan amount and down payment
• Credit score
• Property type and occupancy (primary residence, second home or investment property)

If any of those change, for example if the appraisal comes in lower than expected and changes your loan-to-value ratio, the pricing on your lock can change as well.

Common lock periods

Lock periods are measured in days. Common options are 30, 45 and 60 days, and many purchases close comfortably within that range.

As a general rule, the longer the lock, the higher its cost. The lender is taking on more market risk by holding your pricing for a longer period, and that cost is usually reflected in slightly less favorable pricing or an added fee. The difference between lock periods varies by lender and market conditions, so ask your loan officer to show you the tradeoff side by side.

Why a long lock matters for new construction and condos

Some transactions simply take longer than 60 days. In Miami, two situations come up often.

New construction. When you buy a home or condo that is still being built, the closing date depends on the builder finishing the project and obtaining a certificate of occupancy. Construction schedules can slip because of weather, inspections, permitting or materials.

Condos that need extra review. A condo loan may require the lender to review the association’s budget, reserves, insurance and other documents before approving the building. Some buildings take longer to clear that review, particularly if the association is slow to respond. Our condo financing page covers what lenders look for.

In both cases, a short lock may expire before you close. When a lock expires, you typically have two choices: pay to extend it, or relock at current market pricing, which may be worse. Extensions are often priced per day or per block of days, and the cost can add up quickly.

A longer lock from the start, such as 90 or 120 days, can cost more up front but gives you a known rate across a longer timeline. We offer rate lock protection of up to 120 days for situations where the calendar is uncertain. Whether it is worth it depends on how confident you are in the closing date and how the cost of the longer lock compares with the risk of rates moving against you.

What is a float-down?

A float-down is an option some lenders offer that may let you benefit from a drop in rates after you have locked. If market pricing improves by a certain amount before closing, you may be able to reprice once at the lower level.

Float-down options are not universal, and the terms vary widely. Some are built into certain lock products, others carry a fee, and many come with conditions, such as a minimum improvement in pricing or a deadline for making the request. A float-down is not a guarantee that you will get the lowest rate available during your lock period.

If a float-down is available on your loan, ask for the exact terms in writing before you rely on it.

When to lock

There is no perfect moment, and no one can reliably predict where rates are heading. A few practical guidelines:

• For a purchase, many borrowers lock once they have a signed contract and a realistic closing date.
• Choose a lock period that covers your expected closing date plus a cushion for delays.
• If you are buying new construction, ask the builder for their most realistic completion estimate, not the most optimistic one.
• After you lock, respond quickly to document requests so the lock does not run out while your file is waiting.

While your loan is in process, we keep an eye on the market. If pricing improves meaningfully and your loan terms allow a change, we will reach out to talk through your options.

Locking during a refinance

Rate locks work the same way when you refinance. Because there is no purchase contract setting the timeline, you often have more flexibility on when to lock. The same rules still apply, though: the lock needs to cover the time required for the appraisal, underwriting and closing. If you are weighing a refinance, see our refinance options.

What to ask your loan officer

Before you lock, it is reasonable to ask:

• How long is the lock, and on what date does it expire?
• What would a longer lock cost compared with this one?
• What does an extension cost if closing is delayed?
• Is a float-down available, and on what terms?
• What changes to my file could affect the locked pricing?

Your Loan Estimate shows whether your rate is locked and when the lock expires, and your lock confirmation will list the details that apply to your loan.

Plan your timeline with us

A rate lock works best when it matches a realistic closing timeline. Start with a 30-minute goal consultation: we will review your purchase or refinance, the likely timeline and the lock options that fit it. Request your consultation.