What a rate lock is — and what it is not
A rate lock is a lender's commitment to hold a specific rate and price combination for a set number of days while your loan moves to closing. Lock at a given rate with a 45-day lock, and that pricing holds even if the market moves against you the next morning. That is the entire product: price protection for a window of time.
What it is not: a commitment to lend. A lock does not mean you are approved — your income, credit, appraisal, and the property all still have to clear underwriting. It also is not free insurance against every change: if your loan itself changes (lower credit score at re-pull, higher LTV after a low appraisal, switching from a conventional to FHA structure), the lock is re-priced to match the new loan. The lock freezes the market, not your file.
Lock periods and what longer ones cost
Locks come in standard windows — 30, 45, 60, and 90 days, with some lenders offering 15-day locks for clean, ready-to-close files. Longer locks cost more because the lender is carrying market risk for longer. The cost usually shows up in pricing rather than as a separate fee.
| Lock period | Typical incremental cost vs 30-day | Best for |
|---|---|---|
| 15 days | Slight pricing credit | Clear-to-close refis |
| 30 days | Baseline | Fast purchases, most refis |
| 45 days | ~0.125 point | Standard purchase timelines |
| 60 days | ~0.25 point | Slower transactions, condo reviews |
| 90 days | ~0.375–0.5 point, sometimes upfront | New construction, long escrows |
One point is 1% of the loan amount, so on a $450,000 loan the jump from a 30-day to a 60-day lock costs roughly $1,125 in pricing. The right move is matching the lock to your realistic closing date — not the optimistic one on the contract.
Float-down options
A float-down is a one-time right to reset your locked rate lower if the market improves before closing. It sounds like a free lunch; it is not. Float-downs typically cost something — either an upfront fee, slightly worse initial pricing, or both — and they carry triggers: most require the market to improve by a minimum threshold (commonly 0.25%) before you can exercise, and many reset you to a rate slightly above the new market, not at it. If you believe rates are more likely to fall than rise during your escrow, a float-down can be worth pricing out. Just read the trigger terms before paying for one.
Expiration, extensions, and the fee math
If your lock expires before closing, you do not lose the loan — you lose the pricing protection. You have two options: pay to extend, or relock at current market (typically at the worse of your original pricing or today's — lenders do not let you expire on purpose to catch a rally).
Extension fees usually run about 0.02% of the loan amount per day, often sold in blocks (0.125% per 7 days is a common menu). Worked example: your $450,000 purchase is set to close on day 58 of a 60-day lock, but the seller's payoff delays closing by 10 days. A 10-day extension at 0.02% per day costs 0.20% × $450,000 = $900. Annoying, but compare the alternative: if the market has moved 0.25 points against you since you locked, relocking would cost $1,125 — and if it has moved half a point, $2,250. Extensions are usually the cheaper path when the delay is short and known. Whose delay it is matters too: if the lender caused it, push hard for them to eat the extension fee. Many will.
When to lock: the contract-clock reality
On a purchase, the clean answer is: lock once you have a signed contract and a realistic closing date. Before contract, most lenders will not lock you at all — there is no property, no appraisal, no closing date to lock against. This is why shopping-stage borrowers comparing quotes are really comparing unlocked pricing that can shift daily; get your preapproval done early, then compare lenders quickly and lock fast once under contract. Every day you float after contract signing, you are making an interest-rate bet with your housing payment.
On a refinance, you control the clock, which changes the game. There is no contract deadline forcing your hand, so you can float and wait for a favorable day — but you can also dither your way through a rally. A disciplined approach: decide in advance what rate makes the refi worth doing, and lock the day pricing hits your number. Refis also suit shorter, cheaper locks since there is no seller or moving truck involved.
The uncomfortable truth about lock timing: nobody — not your loan officer, not the market commentators — reliably predicts short-term rate moves. A lock is not about winning the bet. It is about taking the bet off the table once the deal in front of you works.
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