Rate locks explained: how long, what they cost, and float-downs
How a mortgage rate lock works, how long to lock for, what extensions and float-downs can cost, and what can still change your rate. Worked example.
By Sowmya, Licensed Loan Officer, NMLS #2528067Published 7 min read
Mortgage rates move every day. A rate lock is your lender’s promise to hold a specific rate, with specific points or credits, while your loan moves toward closing. Here’s how locks work, how long to lock for, what they can cost, and when a float-down might be worth it.
What a rate lock does
According to the CFPB, a lock means your rate won’t change between the offer and closing, as long as you close within the lock period and nothing in your application changes. Until you lock, your rate can change at any time.
When you lock, your lender also sets the discount points you pay or the lender credits you get at that rate. That matters, because the same rate can come with different costs. Our buydown guide explains how points work.
How long should you lock?
The CFPB says locks are typically 30, 45 or 60 days, and sometimes longer. The right length is the one that comfortably covers your closing date. Lenders set their own options and prices, and a longer lock can cost more.
| Situation | What to think about |
|---|---|
| Purchase with a contract and a set closing date | Pick a lock that runs past your closing date, with a little room for delays |
| Refinance | There’s no sales contract deadline, but appraisal and title work still take time |
| Still shopping for a home | Ask whether your lender will lock before you have a property under contract |
| New construction | Build timelines can run months; some lenders offer longer locks, which may cost more |
If you’re worried the lock is too short, the CFPB suggests asking about a longer one before you lock, not after.
What a lock can cost
Some lenders don’t charge a separate fee for a standard lock. Costs tend to show up in three places:
- Longer lock periods. A longer lock can come with a slightly higher rate, more points or an upfront fee.
- Extensions. If closing slips past your lock date, extending it can be expensive, according to the CFPB.
- Float-downs. If offered, a float-down often has its own fee or pricing adjustment.
Your Loan Estimate shows whether your rate is locked and until when, at the top of page 1. But the CFPB notes it doesn’t show extension costs or what a different lock period would cost. You have to ask.
What can still change a locked rate
A lock protects you from market moves, not from changes to your loan. The CFPB lists these as things that can still change your rate or pricing:
- Changing your loan type or your down payment
- An appraisal that comes in higher or lower than expected
- Big changes to your finances before closing, such as a new loan or a missed payment
- Income, such as overtime or a bonus, that your lender can’t document
Float-downs: protection if rates fall
The downside of a lock is that if rates drop, you may be stuck with the higher rate. A float-down option lets you move to a lower rate once if market rates fall before closing. Terms vary, but common features include:
- A one-time adjustment, usually within a set window before closing
- A minimum drop in rates before you can use it
- A fee or pricing adjustment, which may be nonrefundable
Not every lender offers float-downs, and the fee can outweigh the benefit if rates don’t fall enough. Some lenders instead let you pay to relock at a lower rate. Ask how your lender handles a rate drop before you lock.
A worked example on a $320,000 loan
Say you lock a $320,000, 30-year fixed loan at 7.00%. Here’s how small rate moves change the monthly principal and interest.
| Rate (illustrative) | Monthly principal and interest | Change vs. 7.00% |
|---|---|---|
| 6.75% | $2,075.51 | About $53 less a month |
| 7.00% (your lock) | $2,128.97 | None |
| 7.25% | $2,182.96 | About $54 more a month |
Run your own numbers in the mortgage calculator, and compare points against rate in the rate buydown calculator.
Your revised Loan Estimate after locking
If your rate wasn’t locked when you got your first Loan Estimate, federal rules require your lender to send a revised Loan Estimate within three business days of locking. It should show your locked rate, points, lender credits and other charges tied to the rate. Compare it with the first one. Our Loan Estimate guide walks through each section, and which closing costs you can shop for explains the fees around it.
When to lock
No one can predict rates day to day, so the goal isn’t to time the bottom. A lock is about certainty: knowing your payment while you finish the process. Things that can help you decide:
- Your budget. If a quarter point higher would strain your payment, a lock removes that risk.
- Your timeline. Lock when you know your closing date and can pick a period that covers it.
- Your options. Know whether a float-down or relock is available before you decide to wait.
Check today’s mortgage rates and set rate alerts so you see moves as they happen. For the bigger picture, read where mortgage rates are headed.
Questions to ask before you lock
- Is my rate locked now, and until what date?
- What lock periods do you offer, and what does each one cost?
- What happens if closing is delayed, and what does an extension cost?
- Could anything still change my rate after I lock?
- What happens if rates go down after I lock? Do you offer a float-down?
Want a second set of eyes on a lock offer? Ask Lowi™ to walk through it with you. Kwalifai never sells your number to lenders.
Frequently asked questions.
How long does a mortgage rate lock last?
Locks are typically 30, 45 or 60 days, according to the CFPB, and some lenders offer longer ones, such as for new construction. Choose a period that covers your expected closing date with some room for delays.
Does it cost money to lock a mortgage rate?
Some lenders don’t charge a separate fee for a standard lock, but longer lock periods can cost more through a higher rate, points or an upfront fee. Extensions and float-downs usually have their own costs. Ask your lender for each one.
What happens if my rate lock expires before closing?
You may need to extend it, which can cost extra, according to the CFPB. Ask your lender exactly what happens if a lock expires before you lock.
Can my rate change after I lock?
It can if something in your application changes. The CFPB lists changing the loan type or down payment, an appraisal that comes in different than expected, changes to your finances, and income your lender can’t document.
What is a float-down option?
It lets you move to a lower rate once if market rates fall before closing. Not all lenders offer it, it often requires a minimum rate drop, and it usually has a fee that could outweigh the savings.
Will I get a new Loan Estimate after I lock?
Yes, if your rate wasn’t locked on your earlier Loan Estimate. Federal rules require your lender to send a revised one within three business days of locking, showing your locked rate, points and lender credits.
About the author. Sowmya is a licensed loan officer (NMLS #2528067) in Texas who writes and reviews the guides in the Kwalifai Learning Hub. More about Sowmya
Sowmya is a licensed loan officer (NMLS #2528067) licensed in Texas. Kwalifai is a technology platform, not a lender. Mortgage services are provided by a licensed loan originator (NMLS #2528067) enrolled with Ensure Home Loans LLC (NMLS #1666674). This article is for general educational purposes only and is not an offer to lend or a commitment to make a loan. Loan programs, rates, terms and eligibility vary and are subject to change. Consult a tax professional for tax advice. Equal Housing Opportunity.