What a rate lock does

A mortgage rate lock freezes the interest rate and often the points quoted by your lender for a specific number of days while your loan completes underwriting and you close. Typical lock lengths are 30, 45, 60, or 90 days. Locks protect you if market rates rise between your rate quote and closing; they do not protect you if your loan terms change because of underwriting findings.

How extensions work and common fee structures

Lenders may offer extensions if your closing slips past the lock expiration. Fees vary: some lenders charge a flat fee (e.g., $200–$600), others charge a per-day fee or require you to pay the difference between the locked rate and today’s rate (or a percentage of that difference). In some cases the lender will grant a short extension for free if the delay is the lender’s fault. Policies differ by lender — always get extension terms in writing.

When paying for an extension usually makes sense

  • Compare costs, not emotions. Calculate how much a likely rate increase will raise your monthly payment and multiply the increase by a reasonable horizon (for example, 1–3 years or the life of the loan). If the extension fee is less than that additional cost, paying for the extension is often justified.
  • Example (approximate): on a $300,000, 30-year fixed loan, increasing from 3.5% to 4.0% raises monthly principal-and-interest by about $85. That’s roughly $1,020 more the first year — so a $400 extension fee would likely be worthwhile. Use a mortgage calculator to test your numbers before deciding.
  • Consider timing and market direction. If economic indicators or lender feeds suggest rates are trending up, an extension looks stronger as a hedge. If rates are falling or you have a float-down option, you may prefer to let the lock lapse and re-lock later.
  • Account for one-time vs ongoing impact. Extensions are a one-time cost; a higher contract rate lasts for the life of the loan unless you refinance.

Other factors to include in the decision

  • Float-down options: Some lenders sell “float-down” clauses that let you capture a lower rate if market rates fall before closing. Compare the float-down cost to the extension fee.
  • Who caused the delay: If delays are the lender’s or title company’s fault, insist on a waiver or reduced extension fee.
  • Loan type and market sensitivity: Adjustable-rate and jumbo loans can react differently to market swings; consult your loan officer about product-specific risks.

Practical steps to reduce the need for extensions

  1. Start underwriting early: Provide complete documentation quickly. See our mortgage underwriting checklist for what lenders typically want: Understanding Mortgage Underwriting: What Papers Lenders Want.
  2. Track the closing timeline: Confirm the expected closing date in writing, and ask for contingency plans if the title or appraisal is delayed.
  3. Communicate proactively: Tell your lender immediately about known delays and request extension quotes early.
  4. Avoid common delays that cost you locks: review common closing mistakes and how to prevent them in our guide: Common Mistakes That Slow Down Mortgage Closings.

Questions to ask your lender before locking or extending

  • What is the lock confirmation (in writing) and its exact start and end dates?
  • What is the extension fee structure: flat fee, per-day, or rate-differential?
  • Is a float-down option available, and at what cost and conditions?
  • Will any lender-caused delays result in a fee waiver?
  • How will an extension affect loan disclosures and the Closing Disclosure timeline?

Authoritative sources and further reading

  • Consumer Financial Protection Bureau: “What is a rate lock?” — practical consumer guidance on rate locks and protections (https://www.consumerfinance.gov/ask-cfpb/what-is-a-rate-lock-en-1558/).
  • Freddie Mac and other secondary market guides explain common lock practices and seller requirements; review your lender’s lock policy and the investor overlays that apply to your loan.

Brief real-world perspective

In my practice I’ve seen buyers pay modest extension fees that saved several thousand dollars in long-term interest. Conversely, I’ve also counseled clients to let short, cheap locks lapse when rates were falling and a float-down option or re-lock was available.

Professional disclaimer

This article is educational and not personalized financial advice. Exact fees and policies vary by lender and loan product; confirm terms with your loan officer and consider speaking with a licensed mortgage professional for guidance tailored to your situation.