Mortgage Rate Locks: Strategies and When They Expire

How mortgage rate locks work

A mortgage rate lock is a promise from a lender that the interest rate (and usually the points) quoted on your loan won’t change for a set number of days. The lock window starts when the lender issues a written lock confirmation and typically ends on the specified expiration date. During that window, market moves—up or down—don’t change the locked terms, provided the loan closes under the agreed conditions.

Lenders document rate locks in a lock confirmation or commitment letter. That paperwork will show the locked rate, any points or fees, the lock period (e.g., 30, 45, 60 days), and conditions that could void the lock (major changes to the borrower’s credit, loan amount, or property condition).

(Consumer Financial Protection Bureau: https://www.consumerfinance.gov)

Typical lock periods and key dates

• Common lock lengths: 15, 30, 45, 60, 90 days; longer locks (120+ days) exist for complex transactions like new construction. 30–60 days is the industry standard for most purchases.
• Lock effective date: When the lender issues the lock confirmation—this is usually after you sign loan disclosures or formally request the lock.
• Lock expiration date: The final day of the lock window. If your loan has not closed by the end of this day, the lender’s obligation to provide the locked rate typically ends.

Different loan programs may have slightly different conventions. For example, FHA or VA loans may require extra documentation and therefore borrowers sometimes select longer locks; check specific program guidance (HUD: https://www.hud.gov).

What happens when a lock expires?

If your rate lock expires before closing, two main outcomes are common:

1. The lender lets the lock lapse and you move to the lender’s current rate and pricing. That can mean a higher (or sometimes lower) rate than your original lock.
2. The lender offers an extension for a fee. Extension fees vary by lender and are often quoted as a flat fee or a fraction of the loan amount. Some lenders may charge higher fees for multiple or lengthy extensions.

Extensions and re-locks are not automatic—ask for written confirmation. In my experience working with buyers, many lock expirations are avoidable with earlier communication and a realistic timeline when requesting the lock.

Costs, float-downs, and buy-down options

• Lock fees: Most basic locks are free when your lender expects a standard closing timeline, but longer locks or rate guarantees for large loans (like jumbo mortgages) often carry explicit fees.
• Float-downs: Some lenders offer a float-down feature that lets you lock a rate but switch to a lower market rate if rates fall during the lock window. Float-downs usually cost extra or are limited to a single drop and must be requested before closing.
• Buy-downs: A temporary interest-rate buy-down is different from a rate lock; a buy-down pays to lower your rate early in the loan term and can be used alongside a lock if negotiated.

Be sure to clarify whether any credited fees, lender-paid points, or seller concessions affect the locked rate. Small pricing changes—like updated discount point charges—can alter the effective interest you pay even with a locked rate.

(Examples and current options are documented by mortgage aggregators such as Bankrate: https://www.bankrate.com/mortgages/mortgage-rate-locks/)

Strategies by situation

• If you have a ratified purchase contract with a typical 30–45 day closing period: choose a lock that covers your expected closing date plus a modest buffer (7–10 days). That reduces the chance of an extension fee while avoiding higher costs for longer locks.

• If your closing is likely to take longer (new construction, complex underwriting, jumbo financing): pay for a longer lock or add an extension fee budget into closing costs.

• If you’re worried about rates falling but want protection against increases: negotiate a float-down option when you lock. Confirm whether it allows multiple drops and any fees or rate floors.

• For refinances: lock only after your appraisal and income documentation are in order, since a large borrower or property change can affect pricing and make a lock void.

In my practice, I typically advise clients to lock once they have a fully executed purchase contract and the lender has indicated the file is complete for underwriting—this reduces the odds of an unexpected underwriting condition that could void the lock.

How lenders calculate lock costs

Lock-related pricing is influenced by the lender’s hedging strategy, pipeline risk, and market volatility. Lenders often charge more for longer locks because they assume greater market risk. For jumbo loans or thin-margin products, you should expect explicit lock fees or higher points.

Some lenders embed lock costs into the loan’s interest rate rather than a separate fee. That is, a slightly higher quoted rate may provide a longer lock period with no explicit extension fees.

(Fannie Mae and Freddie Mac set secondary-market conventions that indirectly influence lender pricing: https://www.fanniemae.com, https://www.freddiemac.com)

Common mistakes and how to avoid them

• Mistake: Locking too early. If you lock before your documentation is complete, you increase the risk the lock becomes void or your file must be re-priced. Solution: Coordinate the lock with your lender’s underwriter timeline.

• Mistake: Assuming all lenders offer the same lock terms. Solution: Compare lock periods, extension fees, and float-down features when shopping lenders.

• Mistake: Forgetting to check the lock confirmation for conditions that void the lock (e.g., changes in loan amount, buyer credit score drop). Solution: Read the lock confirmation and ask for a plain-English explanation of any conditional language.

Practical checklist before you lock

• Confirm your anticipated closing date and add at least a 7–14 day buffer.
• Ensure your loan file is complete: income, assets, appraisal ordered, title work started.
• Ask whether the quoted rate includes discount points, origination fees, or credits.
• Ask about float-downs and what they cost or allow.
• Get lock confirmation in writing and note the exact expiration date and time.

Real-world examples (hypothetical numbers for illustration)

Example A: Buyer locks at 3.5% on a 30-year, $300,000 loan for 45 days. If market rates rise by 0.75 percentage points during the lock, the borrower is protected and saves roughly $135 a month compared with the new 4.25% rate (assuming principal & term are unchanged). If the lock expires and the lender won’t extend without a fee, the borrower may either accept the higher current rate or pay for an extension if offered.

Example B: Investor selects a 90-day lock for a jumbo purchase. The lender charges a 0.25% lock fee due at closing to cover the extended commitment. The investor judged that the fee was less than the potential monthly cost if rates climbed during a drawn-out closing.

These examples are illustrative; your savings or costs will depend on the loan amount, rate move, and any fees.

Related reading on FinHelp.io

• Learn how lenders allocate closing costs and fees in our article on lender fees during mortgage closing: “How Lender Fees Are Allocated During Mortgage Closing” (https://finhelp.io/glossary/how-lender-fees-are-allocated-during-mortgage-closing/).
• For a deeper look at how paying points affects long-term costs and refinances, read “How Mortgage Points Affect Long-Term Refinance Calculations” (https://finhelp.io/glossary/how-mortgage-points-affect-long-term-refinance-calculations/).
• If you’re unsure how escrow accounts interact with monthly mortgage payments and timeline items that can delay closing, see “What an Escrow Account Covers in a Mortgage” (https://finhelp.io/glossary/what-an-escrow-account-covers-in-a-mortgage/).

Final practical tips and my takeaway

• Don’t let fear drive a premature lock; coordinate timing with your lender’s underwriting milestones.
• Budget for a reasonable extension fee if your transaction has complexity.
• Capture any negotiated float-down or buy-down in writing when you lock.

In my 15+ years advising borrowers, the clearest wins come from planning—agreeing a realistic closing target with your lender, documenting that target, and choosing a lock length that reflects the real-world steps remaining. A well-timed lock is insurance: it costs little or nothing when used appropriately, and it can protect you from paying significantly more over decades should rates rise before closing.

Sources and further reading

Consumer Financial Protection Bureau (CFPB): https://www.consumerfinance.gov
U.S. Department of Housing and Urban Development (HUD): https://www.hud.gov
Bankrate: https://www.bankrate.com/mortgages/mortgage-rate-locks/
Fannie Mae: https://www.fanniemae.com
Freddie Mac: https://www.freddiemac.com

Disclaimer: This article is educational only and does not constitute personalized financial, tax, or legal advice. Your lender’s policies may differ; consult a mortgage professional or attorney for guidance tailored to your situation.