When to Lock In a Mortgage Rate

What Is a Rate Lock?

A rate lock is an agreement between you and your lender that holds a specific interest rate for a set period while your loan is being processed. Once locked, the rate does not change even if market rates move up or down during that window. This gives you payment certainty as you move toward closing.

Rate locks are standard in the mortgage industry. Most lenders and brokers offer them at no additional cost for standard lock periods, though longer lock windows may come with a small pricing adjustment.

How Rate Lock Periods Work

Lock periods are measured in days, and the most common options range from thirty to sixty days. Some lenders offer shorter or longer windows depending on the loan program. The lock period needs to cover the time between when you lock and when your loan closes.

If you are purchasing a home, the lock period should align with your expected closing date. For example, if your closing is scheduled forty-five days from now, a thirty-day lock may not provide enough coverage, and a forty-five- or sixty-day lock would be more appropriate. Tu Phan helps Clackamas County borrowers choose a lock period that matches their transaction timeline.

When to Consider Locking

There is no universally right moment to lock a rate, but a few situations make the decision clearer.

• You have a signed purchase agreement: Once you are under contract, the closing timeline is set and locking protects you from rate increases during the processing period.
• You are comfortable with the current rate: If the rate fits your budget and aligns with your financial goals, locking removes the uncertainty of daily market movement.
• Market conditions are volatile: When rates are moving frequently, locking sooner rather than later reduces the risk that your quote changes before closing.
• Your loan is ready for processing: If your documentation is complete and the lender can begin underwriting, locking at this stage keeps the timeline tight and predictable.

What Happens if Rates Drop After You Lock?

One concern borrowers often raise is what happens if rates fall after they have locked. In most cases, a standard rate lock means your rate stays where it was locked, even if the market moves lower. However, some lenders and brokers offer a float-down option.

Float-Down Options

A float-down allows you to adjust your locked rate downward if market rates drop by a specified amount before closing. Not all lenders offer this feature, and the terms vary. Tu Phan explains the float-down options available through Fairway's lending partners so you know what to expect before you lock.

What Happens if Your Lock Expires?

If your loan does not close before the lock period ends, you may need to extend the lock or accept re-pricing at current market rates. Lock extensions typically come with a small fee. To avoid this situation, work closely with your broker and real estate agent to keep the transaction on schedule. Tu monitors each client's closing timeline and flags potential delays early.

For refinance borrowers, the timing is more flexible since there is no seller-driven deadline. Tu recommends establishing a target rate and payment that meets your refinance goals, then locking when those numbers align. For more on evaluating your options, see our rate quote guide and quote comparison guide.

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