What is a mortgage rate lock, and when should you lock?

A rate lock is an agreement by the lender to honor a specific interest rate and points for a defined period regardless of what the market does in between. Locks typically run 30, 45, or 60 days, with longer periods available at a cost, and the lock is tied to a specific loan amount, property, and program, so material changes to any of those can void it. Before you lock, your quoted rate floats with the market daily and can move meaningfully between application and closing.

The timing question has a practical answer more than a predictive one. Nobody reliably forecasts short-term rate moves, so trying to time a lock against the market is guessing. Lock when you have an executed purchase contract and a realistic closing date that fits comfortably inside the lock period, since an expired lock generally means relocking at current rates or paying an extension fee. Ask three things in writing: what the extension fee is per day or per week, whether the lender offers a float-down that lets you capture a lower rate if the market falls during the lock, and what the exact expiration date is. Closing delays from appraisal, title, or underwriting are common enough that the extension terms matter.

For a refinance, where there is no contract deadline, some borrowers float deliberately while watching the market, which is a reasonable choice only if you can tolerate the rate going the wrong way. Two related cautions. A lock does not lock the fees or the closing costs, which appear on the Loan Estimate and are separately governed by tolerance rules. And a lender that quotes an unusually low rate to win your business and then finds reasons the lock cannot be honored is a known pattern, which is one reason to compare Loan Estimates from several lenders on the same day rather than trusting a single quote.