Rate Locks, Float-Downs & Extensions
Once you are happy with a rate, a rate lock holds it for a set period while your loan closes, protecting you from the market moving against you. Knowing how locks work — and the options around them — keeps you in control.
The basics of a lock
A lock guarantees your rate for a defined window — commonly 30 to 60 days — as long as your loan details and timeline stay within the lock’s terms. If rates rise during that window, you are protected. The longer the lock, the slightly higher the cost, because the lender is carrying more risk.
If the market moves in your favor
Some locks include a float-down option: if rates fall meaningfully after you lock, you can capture a portion of the improvement. It is a feature worth asking about in a falling-rate environment, though it may carry a cost or conditions.
If your closing runs long
If your loan is not ready before the lock expires, an extension can hold the rate a while longer, usually for a fee. The best defense against needing one is simple: return your documents promptly so the file closes inside the original window.
Lock with a realistic timeline. Too short and you risk an extension fee; too long and you pay more than you need. Your loan officer should recommend a lock period matched to your actual closing date — ask them to.