What's a lock-in or a rate lock on a mortgage?

A lock-in or rate lock on a mortgage loan means that your interest rate won’t change between the offer and closing, as long as you close within the specified time frame and there are no changes to your application.

Mortgage interest rates can change daily, sometimes hourly. If your interest rate is locked, your rate won’t change between when you get the rate lock and closing, as long as you close within the specified time frame and there are no changes to your application. Rate locks are typically available for 30, 45, or 60 days, and sometimes longer. If your rate is not locked, it can change at any time.

There can be a downside to a rate lock. It may be expensive to extend if your transaction needs more time. And, a rate lock may lock you out of a lower interest rate if rates fall after you get your loan offer.

Some lenders may lock your rate as part of issuing a Loan Estimate, but some may not. Check at the top of page 1 of your Loan Estimate to see if your rate is locked, and for how long.

If your rate is locked, it can still change if there are changes in your application—including your loan amount, credit score, or verified income.

Here are some common reasons why your interest rate might change, even though it is locked:

• You decided to change the kind of loan you are requesting or the amount of your down payment.
  
• The appraisal on the home you want to buy came in higher or lower than expected.
  
• Your credit score changes, for example because you applied for or took out a new loan, or missed a payment on an existing loan or credit card.
  
• Your lender could not document your overtime, bonus, or other income.

Rate lock policies vary by lender. To avoid surprises, ask:

• "What does it mean if I lock my rate today?”
  
• “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?”
  
• “If I lock my rate, are there any conditions under which my rate could still change?”
  
• “If I lock my rate, and interest rates go down, what happens?”

If you decide to get a rate lock, you should make sure your rate lock agreement is long enough to cover the time until you close on your loan. If you are concerned that your rate lock period might be too short, ask your lender about switching to a longer rate-lock period now.

Tip: Your Loan Estimate will state whether or not your rate is locked but it will not provide you with information about how much it would cost to extend the rate lock, how much you are paying for the specific rate lock time frame, or whether you could pay more or less for a different time frame. You should ask about those details.