When to lock in your mortgage rate: timing, length and float-downs

Rates moved twice this week, you’re under contract or close to it, and you want to know whether to lock now or wait. Here’s when to lock in your mortgage rate, how long the lock has to run, what it does and doesn’t protect, and what happens if rates drop after you lock.

What a rate lock does, and what it doesn’t

Mortgage pricing moves all day, every day, like a stock. When I lock your loan, I freeze the stock ticker: the lender holds your rate and its price (the points you pay or the credit you get) for a set number of days.

What a lock doesn’t do matters just as much:

• It doesn’t last forever. It ends on a date, and a lock that runs out before your loan funds is a problem. More on that below.
• It doesn’t freeze your file. The price was set for a specific loan: the amount, program, credit score, down payment, property type and whether you’ll live there. Change one and the price can change, up or down. I’ve had a locked borrower’s price get better after documented income lowered their debt-to-income ratio.
• It doesn’t drop on its own if rates fall. That takes a float-down or a move to another lender, both covered below.

A quote, a text or a fee sheet isn’t a lock

Before you lock, every number you’ve seen is a snapshot. A rate in a text, a fee sheet, a “pricing is here” email: none of them binds anybody. A fee sheet isn’t even a Loan Estimate. An unlocked quote is worth exactly the word of the person who sent it, and the market can move it by the afternoon.

Once you lock, your Loan Estimate shows it. Page 1 has a rate lock line that says yes, with the date and time the lock ends. That’s the document to hold up against another lender’s: locked Loan Estimate to locked Loan Estimate, nothing else.

Pricing really does move that fast. On one 2026 file, a buyer who floated while shopping lenders came back about $1,600 worse in three days. In my files, a single repricing on a normal day can cost 10 to 20 basis points of price (100 basis points is one point), which is $320 to $640 on a $320,000 loan.

When to lock in your mortgage rate

My rule: lock when the contract is ratified. My standard is to lock with your OK within 24 hours of a signed contract, at the same time the disclosures go out and the appraisal and title get ordered. That’s the first day of the steps from contract to closing. Once you have a house, a closing date and a lock, the market stops mattering for this loan.

Before you have a contract, float. There’s nothing for a lock to protect yet. While you shop, I run your numbers at two rates: the live one, and a planning rate a little higher. Base your house hunt on the planning rate, so one bad week in the market doesn’t blow up your budget. I’d rather tell you it costs more and have it cost less.

Should I lock or float?

Once you’re under contract, almost always lock. A few cases change the timing:

• A credit rescore is in the works. A better score can improve your price, so I float, watch the market, and lock with your OK the moment the new score posts or the market turns against us.
• The market is jumpy. Then I ask every client under contract for the OK to lock that day. Nobody can touch the deal.
• You’re comparing lenders. Have each one price on the same day, then lock the one you pick right away. A price that sits for three days is a different price.

How long can you lock a mortgage rate? Cover funding day, not signing day

Most locks I price run 30, 45 or 60 days, and a longer lock costs a bit more. The length has nothing to do with the day you sign. A lock must survive funding day, not signing day.

On a purchase in Virginia, the lender has to get the loan money to the settlement agent at or before closing, so signing and funding usually land together. The risk is a closing that slides: a Closing Disclosure that has to be reissued and can restart its waiting period, a late appraisal, a title problem, a condo project review. On most refinances of the home you live in, the gap is built in. Federal law gives you until midnight of the third business day after you sign to cancel (a purchase has no such right), the loan can’t fund until that window closes, and Virginia law then has the lender send the money within one business day. Sign on a Monday and the earliest a refinance funds is that Friday.

Here’s how I size a lock:

When the price difference between lock periods is small, go longer. On one August 2026 file, the gap between a 30-, 45- and 60-day lock was only about $200 to $400. It’s better to have it and not need it than need it and not have it, and you can always close early. In my files a lock is good through its expiration date, so one that expires on the 17th holds through the 17th. Read your confirmation for the exact date and time.

Rate lock extensions, relocks and what they cost

An extension buys more days on the same lock, and it isn’t a courtesy. Extensions come in blocks of days. Each block costs a fraction of a point, usually taken out of your pricing as a smaller credit or more points, the price tends to climb with each one, and lenders cap how many a file can get. Past the cap, some lenders reprice the lock at the worse of your original price and the current market. I’ve seen stacked extensions on one file add up to more than a full point. Every tenth of a point is $320 on a $320,000 loan, so this is real money.

A lock that lapses isn’t extended. It’s relocked, at current pricing, and some lenders price a relock at the worse of your old lock and today’s market for a while after expiration. Sometimes a short relock prices a little better than another extension, so ask for both numbers.

My approach: clear the last condition first, then extend for only the days you need. If the loan can close fast, absorb the cost and finish with that lender. If the delay is long (a condo project review that will outlast the lock, say), letting the lock lapse, floating through the review and relocking can cost less than paying for extension after extension.

What happens if rates drop after you lock? Float-downs and switching

Your locked price holds, and it doesn’t fall on its own. There are two ways to capture a drop.

A float-down. Some lenders will lower a locked rate if the market improves enough. In my experience most of the lenders I work with don’t offer one, and the ones that do set conditions, such as a minimum improvement in both rate and price. Ask before you lock, and get the terms in writing.

A move. Because I work at a mortgage brokerage, I can take your file to another lender if the market improves enough. But moving restarts the loan: a new submission, new underwriting, the processor redoing the work, and a closing date that can slip. And once you’re locked, a better price somewhere else is a “may,” not a sure thing. So I use my own switch rule.

Principal and interest at example rates, starting from 6.75% on a 30-year fixed.

An eighth is about $318 a year on that loan. That doesn’t justify restarting a file and risking your closing date, so I won’t redo a loan to save you an eighth. At about a half point, it’s a different conversation: I couldn’t look you in the face at the closing table and tell you to leave $105 a month behind. And there will always be someone who’ll quote it for less. Chasing every eighth is a race with no finish line. If rates fall a long way after you close, that’s a different decision, a refinance with its own break-even.

Where mortgage rates come from

We all borrow our money from the same place. The difference is what you pay to do it. Mortgage rates come from the trading market for mortgage-backed securities, the bonds that home loans get bundled into. When mortgage bond prices rise, rates fall. When bond prices fall, rates rise. Lenders post new price sheets each morning and reprice during the day when that market moves, which is why a quote from last night can be stale by lunch.

What moves that market, in plain terms: inflation reports, what the Federal Reserve says, oil prices and big world events. When investors get nervous, money runs from stocks into bonds, which can help mortgage rates, then flows back out when things calm down. Markets also move on expectations, so news everyone saw coming is often priced in before it happens.

The Fed doesn’t set your mortgage rate. Fed moves and mortgage rates travel in the same general direction over time, in correlation, not connection. After a Fed rate cut in fall 2025, the pricing on my sheets actually got worse for a stretch. Your lender doesn’t pick your rate out of the air either. The market sets the base, and your loan’s details (credit score, down payment, property type, occupancy, program) adjust it from there.

Why the average rate you see online isn’t your rate

An average rate online is a blend of thousands of loans with different credit scores, down payments, property types, programs and, most of all, different points. Many advertised rates have a point or more of cost built in to get that low. A quote that matches the average proves nothing until you know what it costs.

The math: on a $400,000 loan, one point is $4,000. Say two quotes both come in at an example rate of 6.25%. The one with a point costs $4,000 more at closing while still looking “right in line with the average.” Mailers are worse. In my experience, a mailer quoting a rate well below the market almost always assumes you’ll buy every point the lender allows.

So judge any quote on three numbers side by side: the rate, the points or credit on page 2 of the Loan Estimate, and your cash to close. Then run the break-even on any points with Gap, Savings, Break-Even.

I don’t control the interest rate, and neither does anyone you’ll talk to. What you control is when you lock, how long the lock runs, and whether you read the confirmation. Get those three right and the market can do whatever it wants.