Mortgage Rate Locks Explained: When to Lock, Float-Downs and Extensions

A mortgage rate lock guarantees your interest rate and loan pricing for a set number of days, usually 30 to 60, so that market moves between your contract and settlement don’t change your payment. Most Northern Virginia buyers lock once they’re under contract and the property is known, picking a lock period that runs a few days past the scheduled settlement. The right time to lock, and whether to pay for a longer lock or a float-down option, depends on your timeline and your tolerance for rate risk.

How a rate lock works

When you lock, your lender commits to a specific interest rate and pricing (points or credits) for your loan, as long as you close before the lock expires and your application stays the same. According to the Consumer Financial Protection Bureau, your Loan Estimate shows on page one whether your rate is locked and when the lock expires, but it doesn’t show what the lock period cost or what an extension would cost, so ask your lender directly.

A lock doesn’t freeze everything. Your rate can change if something in the file changes, for example:

• You change loan type, loan amount or down payment.
• The appraisal comes in differently than expected, which changes your loan-to-value ratio.
• Your credit score changes after a new inquiry, new debt or a missed payment.
• Your income can’t be documented the way it was originally submitted, such as bonus or overtime income.
• You switch from a primary residence to an investment property, or vice versa.

For a deeper look at why rates move day to day, see my post on how the Fed and mortgage rates connect.

Lock periods and what they cost

Every lender prices locks differently, but the pattern is consistent: the longer the lender has to hold the rate, the more the lock costs. The Federal Reserve’s consumer guide to mortgage lock-ins covers the same basic tradeoff.

Lock period	When it’s typically used	Cost pattern
15 to 30 days	Refinances or purchases already close to settlement	Lowest cost
45 days	A typical financed purchase in Northern Virginia	Slightly higher rate or a small fee
60 days	Purchases with a longer settlement or extra steps like condo review	Higher cost
90 days or more	New construction or unusual timelines	Higher cost; may need an upfront fee

When to lock

In most purchases, I recommend locking once you have a ratified contract, your lender has your full application, and you know your settlement date. That timing matches the lock to an actual property and closing schedule.

1. Ask your lender about the lock policy up front. Some lenders let you lock at application, others only after a contract. Some charge for longer locks or require a deposit.
2. Choose a lock period that covers settlement plus cushion. If settlement is 35 days away, a 45-day lock often makes more sense than a 30-day lock you’ll need to extend.
3. Decide how much risk you can absorb. If a small rate increase would push your payment past your comfort level, locking sooner can be worth it.
4. Get the lock confirmation in writing. It should show rate, points or credits, loan program and the expiration date.
5. Track your deadlines. Know your appraisal, financing contingency and settlement dates, and how they relate to your lock expiration. My post on how long closing takes explains the typical steps.

Floating, or waiting to lock, can make sense if you have plenty of time before settlement and you’re comfortable with rates possibly rising. Nobody can reliably predict short-term rate moves, so floating is a bet, not a strategy.

Float-down options

A float-down is a feature some lenders offer that lets you lower your locked rate if market rates drop meaningfully before settlement. The details vary widely, so ask about:

• The trigger. Many float-downs require rates to fall by a minimum amount before you can use them.
• The cost. Some are free, some carry an upfront fee, and some are built into a slightly higher starting rate.
• The timing. Many can only be used once and only within a window close to settlement.
• The new rate. You may not get the full market drop; some lenders give you the new market rate plus a margin.

A float-down can be valuable when rates are volatile and your settlement is weeks away. If rates are steady, the cost may not be worth it. Compare the lender’s offer to simply choosing a different lock period or using points. Seller-paid options are another tool, which I cover in rate buydowns explained.

Extensions and expired locks

If settlement slips past your lock expiration, you’ll usually need to extend the lock. Extensions are typically priced per day or in blocks of days, often as a fraction of a point on the loan amount. If the lock fully expires, many lenders reprice the loan at the higher of the original locked rate or the current market rate.

Common reasons for delays include a late appraisal, condo or HOA document issues, title problems, repairs that must be done before settlement, or slow responses to lender requests. Ask your lender and agent who pays an extension if the delay is caused by the other side; in some cases the contract or negotiation can shift that cost.

A worked example

These numbers are illustrative only. A buyer has a $600,000 loan and a settlement scheduled 40 days out.

Choice	Illustrative cost	Outcome if settlement slips one week
30-day lock	Lowest upfront cost	Needs an extension, for example 0.125 points per 7 days, or $750
45-day lock	For example 0.125 points more than a 30-day lock, or $750	Still covered, with a few days of cushion
60-day lock	For example 0.25 points more, or $1,500	Covered with room to spare

In this example, the 45-day lock costs about the same as one extension but removes the risk. That’s why I usually suggest picking a lock period that matches a realistic, not optimistic, settlement date. Use my mortgage calculator to see what different rates mean for your monthly payment.

Common rate lock mistakes

• Choosing the shortest lock to save a little, then paying more for an extension.
• Opening new credit or changing jobs after locking.
• Not getting the lock confirmation in writing.
• Assuming a float-down is automatic.
• Forgetting that some steps, such as condo approvals, can add time.
• Waiting for rates to drop instead of locking a payment you’re comfortable with.

Frequently asked questions

When should I lock my mortgage rate?

Most buyers lock after they have a ratified contract and a settlement date. Lock for a period that covers settlement plus a few days of cushion.

Can I lock my rate before I find a house?

Some lenders offer lock-and-shop programs, but they often cost more and come with conditions. Ask your lender how its program works.

What happens if my rate lock expires?

You’ll typically need to pay for an extension or relock, sometimes at the higher of your original rate or the current market rate. Talk with your lender as soon as you see a delay coming.

Is a float-down worth it?

It can be when rates are volatile and settlement is weeks away. Compare the cost and conditions with your lender, and consider a licensed loan officer’s advice for your situation.