Rate locks explained: when to lock, what a float-down is, and what happens if you close late

Tyler Koski

2 hours ago

3 min read

Somewhere between your offer being accepted and your loan closing, someone will ask whether you want to lock your rate. Most buyers say yes without knowing what they've agreed to, which is fine right up until the closing slips a week.

What a lock actually is

A commitment from your lender to hold a specific interest rate for a specific number of days — typically 30, 45 or 60 — provided your loan closes inside that window.

Two things follow from that, and both matter.

It's mutual. You're not just protected from rates rising; you're also committed if they fall. That's the trade.

It has an expiry, and the expiry is real. A lock that runs out doesn't quietly renew. You either pay to extend it or you take whatever the market is doing that day.

Longer locks cost more, usually built into the rate rather than charged as a fee. A 60-day lock is priced slightly worse than a 30-day one, because the lender is carrying the risk for longer.

The thing nobody connects

Your lock period and your closing date are the same decision, and people negotiate them separately.

A buyer agrees to a 45-day close because the seller wanted it, then locks for 30 days because it priced better. That's two weeks of exposure created by two reasonable choices made in different conversations.

The rule worth following: lock for longer than you think you need. The gap between a 30- and 45-day lock is small. The cost of an extension, or of losing the rate entirely, is not.

And be honest about what can slow a closing, because it's rarely the lender. An inspection negotiation that takes a week. A repair bid that takes ten days to arrive. A title issue — an unreleased old mortgage, an heir who needs to sign. Any of those can push a closing, and none of them care about your lock.

Extensions

Most lenders will extend, and most charge for it — typically a fraction of a point, scaled to the number of days. Not catastrophic, but it's real money arriving at the least convenient moment.

Worth asking two questions when you lock, not when you're extending:

What does an extension cost, per day or per week?
Who pays if the delay is the lender's fault? Some lenders will absorb an extension caused by their own underwriting backlog. That policy is much easier to establish up front than to argue about later.

Float-downs

A float-down lets you capture a lower rate if the market moves down meaningfully during your lock, usually once, usually with conditions and a cost.

It's worth considering when you're locking for a long period during a volatile stretch, and worth skipping when you're locking for thirty days in a quiet one. The mistake is treating it as free insurance — it's priced in, and over many transactions you pay for it whether you use it or not.

When to lock

There's no clever answer, and anyone offering one is guessing about interest rates.

The defensible version: lock when you have an accepted offer and a credible closing date, choose a window with genuine slack in it, and stop watching the market afterward. You've bought certainty. Spending the next month re-litigating it is the cost you didn't budget for.

If rates are moving fast, that's an argument for locking sooner and longer, not for waiting to time it.

Where this fits

The lock runs across escrow — the stretch between accepted offer and keys, and the place where a delay somewhere else in the deal turns into a cost on your loan. If you are adding up what is actually due at the table, closing costs in Oregon covers the rest of the line items, including where an extension fee would land.

About to lock and unsure how much runway to buy? Start a conversation.