Understanding mortgage rate locks
Why should I lock in an interest rate?
Interest rates are unpredictable, so if you've found a loan that meets your budget, consider locking in the rate. Locking a rate can protect you from swings in the market. You'll likely pay a fee to lock a rate. The fee may vary from lender to lender.
When can I lock an interest rate? How long does it last?
You can lock an interest rate up to 5 days before closing. Rate locks usually range from 30 to 90 days. Ask your home buying team when they expect you'll close on your new home and plan accordingly.
What happens if a rate lock expires before closing?
If it looks like your closing will be delayed, ask your lender about a rate lock extension as soon as you can. If your lock expires, you'll need to pay a relock fee and your new rate will be either the current market rate or your original lock rate, whichever is higher.
Do the pros of a rate lock outweigh the cons?
As we mentioned, interest rates are unpredictable. Sure, they can go down after you lock, but they can also go up. Locking a rate protects you from a rate increase which could impact your monthly payments and overall budget. Locking at a lower rate could also save you money over the life of your loan.