Mortgage Rate Lock: How It Works and What to Ask Your Lender

A mortgage rate lock means the interest rate on a loan offer will not change between the offer and closing, as long as the borrower closes within the specified time frame and nothing changes in the application, according to the Consumer Financial Protection Bureau. Because mortgage interest rates can change daily, and sometimes hourly, a rate that is not locked can change at any time before closing.

What is a mortgage rate lock, and how long does it last?

The CFPB says rate locks are typically available for 30, 45 or 60 days, and sometimes longer. Some lenders lock the rate as part of issuing a Loan Estimate, and some do not, so a borrower should not assume a quote is locked.

The Loan Estimate is the place to check. It is a standard three-page form that every lender must provide within three business days of receiving a mortgage application, and the top of page 1 shows whether the rate is locked and until when. Because all lenders use the same form, it is also the simplest way to compare offers side by side. The Iron Hill Mortgage guide to what closing costs really include walks through the cost sections of the same document.

What can change a locked rate?

A lock is conditional. The CFPB notes that a locked rate can still change if the application changes, including the loan amount, credit score or verified income. Common reasons include:

• Switching to a different kind of loan or changing the down payment
• An appraisal that comes in higher or lower than expected
• A credit score change, for example from applying for or taking out a new loan, or missing a payment on an existing loan or credit card
• Overtime, bonus or other income that the lender cannot document

The CFPB calls these situations a "change in circumstances." When one occurs, the borrower will likely receive a revised Loan Estimate, and the lender may also be allowed to change certain closing costs. Keeping the application steady after locking, including holding off on new credit, helps protect the terms on the lock.

What happens if closing runs past the lock?

Timing matters as much as the lock itself. Even a locked rate can change if the loan does not close within the rate-lock time frame, and the CFPB warns that a lock may be expensive to extend if a transaction needs more time. In a purchase, appraisal scheduling, title work, repairs and the seller's timeline can all push a closing date.

The bureau's advice is to choose a lock period long enough to cover the time until closing, and to ask the lender about switching to a longer lock early if the current period looks too short. Near the end of the process, the lender must deliver the Closing Disclosure at least three business days before closing, which gives the borrower time to compare the final loan terms with the Loan Estimate and ask questions before signing.

A lock also cuts both ways: if market rates fall after a borrower locks, the lock may keep the borrower from getting the lower rate. Policies on that point vary by lender.

What should you ask before you lock?

The Loan Estimate states whether the rate is locked, but it does not show what the lock period costs, what an extension would cost or whether a different period could cost more or less. The CFPB suggests asking directly:

• What does it mean if I lock my rate now?
• What rate lock time frame does this Loan Estimate provide?
• Is a shorter or longer rate lock available, and at what cost?
• What if my closing is delayed and the rate lock expires?
• Are there any conditions under which a locked rate could still change?
• If I lock my rate and interest rates go down, what happens?

Before choosing a loan amount, borrowers can see how the rate and term shape the payment with the Iron Hill Mortgage monthly payment calculator.

Frequently asked questions

Does a rate lock guarantee my interest rate no matter what? No. According to the CFPB, a locked rate holds only if the loan closes within the lock period and the application does not change. Changes to the loan type, down payment, appraised value, credit or documented income can all change the rate.

Where can I see whether my rate is locked? At the top of page 1 of the Loan Estimate, which shows whether the rate is locked and until when. It does not show the cost of the lock or of an extension, so ask the lender.

Can I lose the lock if closing is delayed? If the loan does not close within the rate-lock time frame, the rate can change, and extending the lock may be expensive. Choosing a lock long enough to cover the expected time to closing reduces that risk.

Sources

• Consumer Financial Protection Bureau, "What's a lock-in or a rate lock on a mortgage?" (last reviewed May 2, 2023): https://www.consumerfinance.gov/ask-cfpb/whats-a-lock-in-or-a-rate-lock-en-143/
• Consumer Financial Protection Bureau, "What is a Loan Estimate?" (last reviewed Aug. 9, 2024): https://www.consumerfinance.gov/ask-cfpb/what-is-a-loan-estimate-en-1995/
• Consumer Financial Protection Bureau, "What is a Closing Disclosure?" (last reviewed May 2, 2023): https://www.consumerfinance.gov/ask-cfpb/what-is-a-closing-disclosure-en-1983/
• Consumer Financial Protection Bureau, "Can my final mortgage costs increase from what was on my Loan Estimate?" (last reviewed Sept. 11, 2024): https://www.consumerfinance.gov/ask-cfpb/can-my-final-mortgage-costs-increase-from-what-was-on-my-loan-estimate-en-172/