Rate Lock.
In plain English
A rate lock is an agreement where your lender promises to keep your quoted mortgage interest rate for a specific number of days, often 30 to 60, while your loan moves toward closing. It protects you from rate increases during that window. If market rates climb before you close, your locked rate stays the same; if they fall, you are usually stuck at the locked rate unless your lock includes a float-down option. Locks have expiration dates, and if your closing slips past the deadline you may have to pay an extension fee or relock at current rates.
01Why it matters
Rates can move day to day, and a fraction of a percent changes your payment for decades. A lock removes that uncertainty so a rate spike during underwriting does not blow up your budget.
02The math, step by step
You lock a 6.5 percent rate for 45 days while your loan is processed. Two weeks later market rates jump to 7 percent, but because you locked, you still close at 6.5 percent. If closing had been delayed past day 45, you might have paid an extension fee to keep that rate.
03What this is NOT
A lock holds the rate, not the whole deal. It can still expire if closing is delayed, and it can be voided if your loan details change, such as a different loan amount, a lower credit score, or a changed property.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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