Should I lock my mortgage rate?
Locking protects you from rates rising before you close. Floating bets they will fall. Here is how to weigh the tradeoff for your own timeline.
A rate lock holds your quoted interest rate for a set window so a market move cannot raise it before you close. Locking makes sense when you are comfortable with the current quote and want certainty; floating makes sense only if you can absorb the risk that rates rise. The right call depends on your closing timeline and how much uncertainty you can stomach, and I help clients make that decision case by case.
How a rate lock works
When you lock, the lender commits to your quoted rate for a defined period, commonly tied to your expected closing date. If the market moves up during that window, you keep your locked rate. If your closing slips past the window, an extension may be needed and can carry a cost.
Locking removes uncertainty. You trade the chance of a lower rate for protection against a higher one.
Lock or float: weighing the tradeoff
Lock when you are happy with the quote, your closing is in sight, and you would rather not gamble. Floating only pays off if rates fall before you close, and it exposes you to the opposite. For most buyers on a firm timeline, certainty is worth more than the chance at a slightly better number.
I talk this through with every client based on their contract dates and risk tolerance rather than a blanket rule.
What if rates drop after I lock
Some programs offer a one-time float-down that lets you capture a lower rate if the market improves meaningfully after you lock, subject to the lender's terms. Where it is available, I will tell you. And if rates fall substantially after you close, a refinance is always on the table.
All locks, float-downs, and loans are subject to program terms, credit approval, and eligibility.
Common questions
Should I lock my mortgage rate or float?
Lock when you are comfortable with the quote and want protection from rates rising before you close. Float only if you can absorb the risk that rates go up instead. For buyers on a firm closing timeline, the certainty of a lock usually outweighs the chance at a slightly lower number.
How long does a rate lock last?
Locks run for a set window, commonly aligned with your expected closing date. If closing slips past the lock window, an extension may be available and can carry a cost, so it helps to align the lock with a realistic timeline.
What happens if rates drop after I lock?
You generally keep your locked rate, but some programs offer a one-time float-down that can capture a meaningful improvement, subject to the lender's terms. If rates fall substantially after closing, a refinance can recover the difference. I will flag a float-down when one is available.
Not sure whether to lock?
Tell me your contract dates and I will walk through lock versus float for your file. Watch the market with me on Rate Watch in the meantime.