How Mortgage Rate Locks Work

When purchasing a home, most of us want to secure the lowest mortgage rate possible; but what happens if rates go down before you’re ready to close? That’s where a mortgage rate lock comes in. It’s one of the most important tools homebuyers can use to help get the lower rate in a changing market. But how exactly does it work, and is it right for your mortgage strategy? We’ll break down everything you need to know about how mortgage rate locks work, including what they are, the different types, how long they last, and what happens if rates drop after you lock.

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What Is A Rate Lock?

A rate lock is an agreement between you and your lender that guarantees a specific interest rate for your mortgage over a set period of time—usually from the time you apply until your loan closes. This means even if market rates go up, your interest rate will stay the same. This protection can give borrowers peace of mind, especially in an environment with rising rates. However, it’s also important to understand that once a rate is locked, it typically won’t go down if market rates fall – unless you have a special feature built in (more on that later). For a deeper dive into how it works, check out this NerdWallet guide.

What Types of Mortgage Rate Locks Are There?

Not all rate locks are created equal. Here are the most common types of rate locks lenders offer:

STANDARD RATE LOCK

This is the most common option. It guarantees your interest rate for a fixed number of days – usually 30, 45, or 60 – while your loan is being processed.

RATE FLOAT-DOWN OPTION

A rate float-down allows you to lock in your rate with the option to adjust downward if market rates drop during your lock period. This option may come with an extra fee, but it may be worth it if you want to have the most flexibility.

LOCK-AND-SHOP

Some lenders offer a lock-and-shop program, which lets you lock your rate before you’ve found a home. This helps protect you from rising rates during your home search but typically includes conditions and may cost more.

How Long Does A Rate Lock Last?

The length of your rate lock may vary. The most common lock periods are:

15 days
30 days
45 days
60 days
90+ days (less common and usually more expensive)

The longer your rate is locked, the higher the cost or higher the rate you may be offered. Choosing the right length depends on how quickly you expect your mortgage to close. If your lock expires before closing, you may have to pay to extend it or face current market rates, which could be higher.

What Happens If Rates Drop?

One of the biggest concerns for borrowers is locking in a rate only to see interest rates fall before closing. Here’s what to know:

Standard locks don’t adjust downward: If you choose a basic rate lock, your rate stays fixed – even if the market improves.
Rate float-downs offer protection: If you paid for a float-down feature, you may be eligible for a one-time adjustment to a lower rate during your lock period.
Renegotiate with your lender: In some cases, your lender might offer to renegotiate your rate if there’s a significant drop, but this usually comes with added fees or closing costs.

Ultimately, the peace of mind a locking your rate can outweigh the risk of missing out on a better rate, but it’s worth discussing your options with your loan officer. You can also run the numbers using our mortgage calculator to see how rate changes could affect your monthly payment.

Should You Lock Your Mortgage Rate?

A rate lock is a valuable tool for any homebuyer or homeowner refinancing their mortgage. It protects you from rising interest rates and helps to provide some stability during the buying process. Understanding the type of rate lock, the rate lock period, and what happens if rates drop ensures you’re making the most informed decision possible. Work closely with your lender to find the strategy that aligns with your timeline and financial goals.

Still have questions about how a rate lock could affect your home purchase? Speak with one of our qualified and experienced Mortgage Loan Originators to explore your options today.

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About Acrisure Mortgage

Acrisure Mortgage (formerly FBC Mortgage, LLC) is a Top 10 national mortgage lender headquartered in Orlando, Florida. Licensed in 49 states and supported by more than 19,000 dedicated professionals across Acrisure, we specialize in residential mortgage lending through both retail and wholesale/correspondent channels. Our comprehensive offerings include purchase, refinance, construction and renovation loans—tailored to meet the unique needs of homebuyers, homeowners and partners nationwide.

We are proud to serve as a trusted partner to many of the nation’s largest homebuilders and real estate professionals, with a strong foundation of loyal, satisfied clients. Recognized for our commitment to service, innovation and operational excellence, Acrisure Mortgage has received numerous national accolades, including Top 50 Mortgage Companies, Best in Loan Delivery and Best Place to Work honors.

As part of the Acrisure family, we are backed by a global fintech leader that shares our values of innovation, integrity and service. Together, this empowers us to expand our capabilities, leverage world-class technology and resources, and grow alongside the clients and communities we serve.