How Long Can You Lock a Mortgage Rate?

When applying for a mortgage, one of the most important decisions you will make is whether or not to lock in your interest rate. A mortgage rate lockallows you to secure a certain interest rate for a set period of time while you go through the mortgage process. This can protect you from rising interest rates while your loan is being processed and approved. 

But how long can you actually lock in a mortgage rate? A mortgage rate can typically be locked in for a period ranging from 15 to 60 days, with 45 days being the average. However, depending on factors such as lender policies, market conditions, loan type and credit score, this period can be extended up to 120 days for an additional fee.

Understanding how long you can lock a mortgage rate, and the process around rate locks, can help you make the best financial decision when applying for home financing.

What Is a Mortgage Rate Lock?

A mortgage rate lock, also called a rate lock agreement, is a guarantee from the lender that they will honor a specific interest rate on your mortgage loan. This allows you to lock in a rate for a certain number of days or weeks while your loan application is processed. If interest rates rise during that period, you still get the lower, locked-in rate.

75% of borrowers lock in their mortgage rate at least 30 days before closing(Source: Mortgage News Daily).

The rate lock protects the borrower if interest rates increase. But it also prevents the borrower from getting a lower rate if interest rates fall before closing. Essentially, it locks in the interest rate and eliminates market risk for both lender and borrower during the lock period.

Why Should You Lock a Mortgage Rate?

There are several key reasons why locking in your mortgage interest rate can be beneficial:

• Protects you from rising interest rates
• Allows you to budget accurately using a locked-in payment
• Eliminates the stress of floating mortgage rates 
• Locking in a mortgage rate can be a good way to protect yourself from rising interest rates (Source: Experian).
• Borrowers who lock in their mortgage rate are more likely to stay on budget and avoid financial stress (Source: Consumer Financial Protection Bureau).

If you are satisfied with the interest rate you are quoted, a rate lock provides peace of mind knowing your rate and monthly payments are secured. This makes the rest of the mortgage process smoother.

When Can You Lock a Mortgage Rate?

You can choose to lock in a mortgage rate as soon as you receive a loan pre-approval from the lender. Most lenders will allow you to lock the rate after the initial approval, before submitting a full application and documentation. 

Some lenders also offer rate locks even earlier, when you apply for mortgage pre-qualification. But keep in mind that pre-qualification is less secure than pre-approval, so locking at pre-qualification may require an additional fee.

The latest you can usually lock a rate is 5 to 10 days before the loan closing. Your lender will have a specific cutoff date. If your lock expires before closing, you may have to pay to extend it.

How Long Can You Lock a Mortgage Rate?

The most common mortgage rate lock periods are:

• 15 days – Typically for quick closings or refinances
• 30 days – Common for normal purchase mortgages
• 45 days – The average mortgage rate lock period (Source: Freddie Mac)
• 60 days – Allows flexibility for new constructions loans or longer closings

According to experts, the mortgage rate lock time period generally ranges from 15 to 60 days. Specific lock periods will depend on:

• Your lender’s policies
• Current mortgage market conditions 
• The type of mortgage loan you are applying for 
• Other factors like your credit score

Longer rate locks of 90+ days may also be available, for an additional fee. But locks longer than 60 days are not very common.

What Happens When Your Mortgage Rate Lock Expires?

If your rate lock period expires before you can close on the home loan, you have two options:

1. Extend the rate lock (see next section)
2. Get a new rate lock at current interest rates 

If market rates have gone up since your initial lock, your new rate will likely be higher. This will increase your mortgage payment unless you pay to extend the original lock.

Letting your rate lock expire is risky when rates are rising. That is why it’s critical to understand lock periods and have a realistic expectation of when you can close. Keep in touch with your lender so you can extend the lock if needed.

Can You Extend Your Mortgage Rate Lock?

Most lenders will allow borrowers to extend an expiring rate lock. Typically you can extend in 15-30 day increments, up to 120 days total. Extensions give you more time to close when your lock is about to expire.

Lock extensions do come at a cost though. The average cost of a rate lock extension is 0.25% (Source: NerdWallet).

This is usually charged in the form of discount points added to your loan balance. One point equals 1% of the mortgage amount. Paying points increases your interest rate but lowers monthly payments.

It’s important to ask your lender about lock extension policies and costs before committing to a rate lock. Never assume you can extend without incurring fees.

What Are the Costs Associated with Extending a Mortgage Rate Lock?

As mentioned above, the most common cost to extend a rate lock is paying 0.25 discount points. On a $200,000 loan amount, 0.25 points would equal $500 ($200,000 x 0.0025 = $500). 

Some lenders may charge a flat fee instead, such as $500. Others charge higher fees, around 0.375 or 0.5 points, for each lock extension.

It’s also possible you will have to pay a new origination fee when re-locking your rate after expiration. Origination fees are usually 1% – 2% of the total mortgage amount. 

Finally, re-locking at current market rates will raise your interest rate and monthly payments if rates have risen since your initial lock. Make sure to consider these costs before letting a lock expire.

Can You Cancel Your Mortgage Rate Lock?

In most cases, borrowers are allowed to cancel an active rate lock if they change their mind or no longer need financing on that home. However, a small cancellation fee usually applies. This fee covers the administrative costs for the lender.

Cancellation fees typically range from 0.125% to 0.5% of the mortgage amount. So on a $300,000 loan, you may pay $375 to $1,500 to cancel the lock agreement. The lender will outline the cancellation policy in the rate lock contract.

What Factors Affect How Long You Can Lock in a Mortgage Rate?

Many different factors impact the mortgage rate lock period you are offered by a lender, including:

1. Lender Policies

Each lender has their own rate lock rules. While locks generally range from 15 to 60 days, specific offers vary. Compare options from multiple lenders. 

2. Market Conditions

When rates are steady or dropping, longer locks may be offered. Shorter locks are common when rates are volatile.

3. Loan Type

Government-backed loans like FHA and VA may offer longer locks of 60+ days. Jumbo loans often have shorter locks.

4. Credit Score

Borrowers with higher credit scores qualify for better rates and longer locks. Minimum scores apply.

5. Down Payment Amount

A higher down payment shows lower risk so may get a longer lock. Expect a shorter lock with a minimal down payment.

6. Property Type and Location

Rate lock periods can vary based on the home type and location. More rural areas or unique properties may have different terms.

7. Loan-to-Value Ratio (LTV)

The LTV compares loan amount to home value. A higher LTV equals higher risk, so shorter lock periods.

8. Debt-to-Income Ratio (DTI)

Your DTI measures total monthly debt payments against income. Lower DTIs get longer lock terms in many cases. 

9. Interest Rates at the Time of Application

When rates are very low, lenders may offer shorter locks so they don’t lose money if rates fall further.

10. Economic Outlook

Expect shorter locks when the economy is uncertain. Longer locks are common in stable conditions.

Is It Possible to Get a Better Rate After You’ve Locked In?

Yes, it is possible to get a lower interest rate even after locking if rates improve before you close. There are a few options:

Float-down – This rate lock allows you to re-lock at a lower rate one time if the market drops. Float-down locks are the most popular type of rate lock (Source: Mortgage Bankers Association).

Lock and shop – Lock with one lender while you continue to shop, then re-lock at a lower rate elsewhere if found. Make sure the new lender honors the old lock.

Lock and hold – Lock your rate then ask lender to monitor the market. They may offer a lower rate if available before closing.

Rate match – Some lenders will match better rates found even after locking. But this is less common and depends on the lender.

Talk to your lender early about these re-locking options if you want flexibility after locking in your mortgage rate.

Conclusion

Knowing how long you are able to lock in a mortgage interest rate is key to protecting yourself from rate hikes during the loan process. While rate lock periods generally range from 15 to 60 days, many factors affect the specific lock term you are offered. 

Work closely with your lender to understand lock options, get the longest term available, and avoid letting your rate lock expire before closing on your loan. Locking in your mortgage rate can save you money over the life of the loan (Source: Bankrate). But make sure you weigh the pros and cons for your situation.

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