Mortgage rate locks: how long to lock, what extensions cost, when to float
A rate lock is a promise with an expiration date. The lender agrees to honor one rate, at one point cost, on one program — provided your loan closes by a given day. Miss the day and the promise is gone, replaced by whatever the market is doing that morning.
What a lock actually freezes
Three things travel together and none of them survives alone: the note rate, the discount points or lender credit attached to that rate, and the loan program and term. A quote of “6.25% with half a point on a 30-year conventional” is a single object. Change the term to 15 years, or the program to FHA, and you are not extending a lock — you are getting a new one at today’s prices.
A lock is also not an approval. Underwriting continues after you lock, and the conditions it produces are what usually threaten the expiration date. Two documents make the lock visible: the Loan Estimate, which states whether the rate is locked and until when, and the lock confirmation itself, which should name the rate, the points, the expiration date and the extension policy. Ask for that confirmation in writing on the day you lock; a verbal lock is not a lock.
What breaks a lock mid-stream
Locks are priced on the file as it stood when you locked. Anything that moves a pricing input sends the loan back to current market for that adjustment, and sometimes for the whole quote:
- a change in loan amount, down payment or purchase price after a renegotiation;
- a change in occupancy (primary to second home or investment) or property type (single family to condo);
- a representative credit score that lands in a different band on the pre-closing refresh;
- a switch of program or term, including a switch driven by an appraisal that comes in low;
- an extension past the expiration date.
Nothing on that list is exotic. Most blown locks are the ordinary consequence of a slow condo project review, a late payoff statement, an income document that had to be re-pulled, or an appraisal ordered a week later than it should have been.
Choosing the length
Longer locks cost more because the lender is carrying interest-rate risk for longer, and that cost shows up either as a higher rate or as points added to the same rate. The ranges below are indicative of what lenders commonly publish and vary by lender, by day and by how volatile the market is — always compare the actual quotes in front of you.
| Lock length | Typical added cost | Where it fits |
|---|---|---|
| 15 days | Sometimes a small credit versus 30 | Refinances already cleared to close |
| 30 days | Baseline pricing at most lenders | Clean purchase files close to clear-to-close |
| 45 days | Free to about 0.125 point | The common choice from contract signature |
| 60 days | Roughly 0.125 to 0.375 point | Condo reviews, self-employed files, slow markets |
| 90 days and up | Roughly 0.25 point and up, often with an extended-lock program | New construction, long escrows, spring contracts closing in summer |
A quarter point on a $400,000 loan is $1,000 at closing. Weigh that against the cost of an extension you may end up buying anyway. On a purchase with a 45-day contract and a lender quoting a 30-day lock, the cheap-looking option is frequently the expensive one.
When a lock expires
Two things typically happen, and you want to know which before you need it. First, an extension fee: commonly quoted per day or in blocks of 7 or 15 days, in the range of about 0.0625 to 0.125 point per week, which on a $400,000 loan is a few hundred dollars per block and can reach four figures on a long overrun. Second, a worst-case pricing rule: many lenders re-lock an expired file at the worse of your original rate or the current market, so a rate drop after expiration does not help you, while a rate rise does hurt.
Ask three questions in writing before you sign anything: what does an extension cost per day or per block, does the lender apply worst-case pricing after expiration, and who absorbs the fee if the delay is on the lender’s side. The last one is a real negotiation. When the file sat for ten days waiting on the lender’s own condition, asking the loan officer to cover the extension is normal and often granted.
Float-downs
A float-down lets you take a lower rate once, before closing, if the market moves down by more than a stated threshold — commonly a quarter point of rate. It is either priced into the lock upfront (often a quarter to a half point) or offered as a one-time courtesy under a written policy. Read the trigger carefully: some policies measure the drop against the lender’s own rate sheet rather than a public index, some require a minimum number of days before closing, and nearly all are once per loan.
A float-down is insurance, and like all insurance it is worth buying when the volatility is real and the premium is small relative to the payment at stake. Compare it against simply paying points for a lower rate today — the arithmetic of that trade is in our guide to points and rate buydowns, and you can see what a rate move is worth in dollars on the $400,000 at 6% payment table.
Lock or float?
Floating means keeping the rate unlocked and taking the market price later. It is a bet, and the honest framing is that nobody — including your loan officer — knows where rates go next. What you can weigh is asymmetry. If a half-point rise would push your payment past what you are comfortable with, or past the debt-to-income ceiling that got you approved, the downside of floating is a dead deal and the upside is a slightly lower payment. That is not a symmetric bet. Borrowers with a thin margin generally lock early; borrowers with room, a long closing window and a lender that offers a cheap float-down have more reason to wait.
Weekly average rates published by Freddie Mac give context for whether you are locking into an unusual week, but they are survey averages, not quotes, and your file’s adjustments can move you well away from them.
A short checklist
- Lock long enough to cover the whole contract, plus a week.
- Get the confirmation in writing: rate, points, expiration date, extension policy.
- Get the appraisal ordered in the first days, not the second week.
- Answer underwriting conditions the day they arrive — that is what protects the lock.
- Do not open new credit, change jobs or move large sums while locked.
- If closing slips, ask early who pays for the extension.
The wider rules that set your pricing bands — score, down payment, occupancy — sit in the conventional loan hub, and it is worth knowing them before you lock, because they are what an extension re-prices.
Frequently asked questions
Can I lock a rate before I have a signed contract?
Some lenders allow a lock at pre-approval on a to-be-determined property, sometimes with a fee or a slightly higher rate. Most require an address. If your lender offers it, confirm what happens if the property you eventually buy changes the loan amount or the property type.
What happens if rates fall right after I lock?
Without a float-down provision, generally nothing — you keep the rate you locked. Your options are to ask whether the lender has a discretionary renegotiation policy, or to compare the cost of starting over with another lender against the lost time, the new appraisal and the risk to your closing date.
Does a rate lock cost money?
Standard 30 and 45-day locks are usually built into the rate rather than charged separately. Longer locks, float-downs and extensions are the ones that carry a visible cost, expressed in points and paid at closing. A few lenders charge a refundable lock deposit; it should be disclosed and credited back.
Is the rate on my Loan Estimate locked?
Only if the form says so. The Loan Estimate has a line stating whether the rate is locked and, if it is, the date and time the lock expires. If it says the rate is not locked, the numbers on that page are an estimate that can change until you lock.
Sources
Related: Mortgage points and rate buydowns: when paying for a lower rate pays off, Closing costs explained: what is negotiable, what is not, ARM vs fixed-rate mortgage: when an adjustable rate makes sense, Pre-approval vs pre-qualification: what sellers actually respect. Hub: Conventional loan.