Should you lock in a mortgage rate in the current housing market?
Mortgage interest rates change daily, meaning the mortgage interest rate you see when you first apply for your mortgage preapproval or approval may not be the same rate you end up with at closing. That's why mortgage rate locks exist. Simply put, a mortgage rate lock freezes your interest rate until the loan closes and protects you from rising rates.
Mortgage rates have been fairly steady lately. Sure, they may increase one day and inch down the next — but there haven't been drastic drops or spikes. When rates are stagnant, is it a good idea to lock in your mortgage rate? Or should you hold off?
Learn more: Strategies for getting the lowest mortgage rates
This embedded content is not available in your region.
In this article:
What is a mortgage rate lock?
When to lock in a mortgage rate
How long can you lock in a mortgage rate?
Pros and cons
How to lock in a mortgage rate
Should I lock in my mortgage rate?
Lenders with unique rate lock programs
FAQs
A mortgage rate lock is a commitment from a mortgage lender guaranteeing that the interest rate on your home loan will remain the same until the day you close on the house — provided the mortgage closes within the specified time frame and there are no changes to your loan application. With a mortgage rate lock, the home buyer can keep the lower rate even if market rates go up.
However, if rates go down when you close on the mortgage loan, you could be stuck with a higher rate. A float-down option takes away that risk. Some mortgage lenders offer rate locks with float-down options, so you can still get a new rate if mortgage rates dip below your rate lock. It typically isn't free, though, and most lenders will charge you 0.5% to 1% of the loan amount. It will only make financial sense to exercise a float-down option if rates drop low enough to justify the cost.
The answer to when you can lock in your rate depends on the mortgage lender. Typically, you can lock in a mortgage rate at any time after you've been approved for the home loan and up to five days before closing. A lender might include a rate lock in the Loan Estimate, which it provides within three days before closing. Some lenders allow you to lock in a rate at other times, such as when you are preapproved.
But with all of these options, when exactly should you lock in a rate? The short answer is: Pay attention to market dynamics.
If interest rates have been stable, locking in your rate early may not be necessary. If rates are falling and are likely to continue in that direction, you may want to wait a bit before locking the rate since you could get a better rate in a few weeks. However, if interest rates are rising or unpredictable, and you're worried you won't be able to afford your mortgage with a higher interest rate, it's worth doing a mortgage rate lock as soon as possible.
Current mortgage rates fall into that first category: stable (well, relatively). So, you may not need to rush to lock in your rate today. However, rate trends have been unpredictable overall in 2025. Keep an eye on rates, and if they start to trend upward, feel free to lock in a rate with a lender.
Dig deeper: How much house can I afford? Use the Yahoo Finance affordability calculator.
Depending on the lender, you can typically lock in a mortgage rate for 30, 45, or 60 days — sometimes even longer. As long as you close within the specified time frame, your mortgage rate won't change. But if your rate lock expires before you close on the loan, you'll have to pay a fee to extend the period of time. The interest rate lock extension fee is typically a percentage of your loan amount. The longer the extension, the higher the cost.
Read more: 6 tips for choosing a mortgage lender
If you're unsure whether locking in your mortgage rate is the right move, weigh these pros and cons to help you make an informed decision.
Protects you from interest rate hikes
You can typically choose from various lock periods, such as 30 or 60 days
Gives you peace of mind
Makes it easier to budget for your home and monthly payments since your interest rate is set
You could miss out on a lower interest rate if you don't have a float-down option
You may have to pay extra to extend the lock after the expiration date
Many lenders charge rate lock fees
Learn more: What determines mortgage rates?
A mortgage rate lock can be helpful if market rates are trending up before your closing date. Take the following steps to lock in your mortgage rate:
Shop around. Before locking in your mortgage rate, submit mortgage preapproval applications with at least three different mortgage lenders so you can compare potential offers. Besides interest rates, you'll also want to compare things like down payment requirements, origination fees, rate lock periods, and float-down options.
Find a home and make an offer. While many lenders allow you to lock in the mortgage rate any time after you've been approved for the home loan and up to five days before closing, you may have to pay extra to extend the lock if the rate lock expires before your loan closes. So, it might be best to start house-hunting and make an offer on the home you want before locking in a rate.
Contact your lender. When you're ready for a mortgage rate lock, reach out to your lender to select the mortgage rate lock period you want and fully understand your options.
Learn more: How long does it take to close on a house?
We don't have a crystal ball to tell you when mortgage rates will go down or whether it's a good idea to lock in your mortgage rate today. Mortgage interest rates will likely decrease a little bit in 2025, but not drastically.
Also, rates on mortgage loans aren't moving much right now due to the political and economic climate. It's usually a good idea to lock in a mortgage rate in an unsteady rate environment because you never know if or when rates will spike.
However, rates could spike or plummet at any point, especially with investors' uncertainty surrounding some of President Trump's policies. That's why it's useful to ask potential mortgage lenders about any float-down options. You'll pay money to activate your float-down option, but at least it gives you the option to get a lower rate even after locking one in.
The best mortgage lenders offer unique rate lock programs to attract customers. Here's how some of them work.
Newrez's Lock & Shop Program. Newrez has a program that locks your interest rate for 45 days while you search for your new home. If rates drop during this period, the lender even lets you relock to get a lower rate at no extra cost. Read the Yahoo Finance Newrez review.
Embrace Home Loans' two float-down options. Embrace Home Loans allows you to lower your interest rate two times instead of one, up to 15 days before closing. Each float-down option costs 0.25% of your total loan amount. Read our Embrace Home Loans review.
Navy Federal Credit Union's Special Freedom Lock. Navy Federal Credit Union mortgages offer a float-down option called Special Freedom Lock that lets you float down twice, but the total rate reduction cannot surpass 0.50%. Navy Federal doesn't charge any fees when you exercise your float-down option unless you extend it past the 60-day rate-lock period. Here is our Navy Federal mortgage review.
Third Federal Savings & Loan. You lock in your rate for 60 days with Third Federal mortgages. The lender even has a 360-day rate lock if you provide 1% of your loan amount up-front as a deposit. Read Yahoo Finance's Third Federal mortgage review.
Read more: The best mortgage lenders for first-time home buyers
If you're locked in and mortgage rates fall, you'll be stuck paying the higher rate unless your rate lock includes a float-down option. A float-down option lets you honor your locked-in rate or the current rate, whichever is lower. This option isn't free, though. You can expect to pay between 0.5% to 1% of the loan amount when you use a float-down. For a $350,000 loan, that's $1,750 to $3,500.
Locking in your mortgage rate is typically worth it when rates are rising or unsteady, and you want to protect yourself from paying a higher rate at closing. If mortgage rates increase after you've locked in the rate, you still get to keep your lower rate.
Lenders typically charge anywhere from 0.25% to 0.5% of your loan amount to lock in a mortgage rate. So, if you take out a $300,000 mortgage loan, you can expect to pay $750 to $1,500 for a mortgage rate lock.
This article was edited by Laura Grace Tarpley.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Verge
23 minutes ago
- The Verge
Tesla's first robotaxi rides will have a ‘safety monitor' in the passenger seat
Tesla has begun sending out invitations for its highly anticipated robotaxi service, but there's one significant caveat: it's installing a 'safety monitor' in the front passenger seat, as previously reported by Electrek. The invites, which were sent to Tesla influencers and investors, say the human monitor will 'accompany you on your trip' when rides begin on June 22nd — a move that's at odds with Elon Musk's promise of fully unsupervised rides. Details about Tesla's robotaxi service have been slim in the weeks leading up to its launch, but Musk said in January that the company would launch its 'unsupervised' robotaxi service with 'no one in the car' this summer. Musk expanded on this in an April earnings call, saying the 10 to 20 Model Y vehicles would be remotely operated in the event of an emergency. Tesla's invitation outlines some requirements for robotaxi rides, including that riders must request service between 6AM and 12AM within a geofenced area, 'excluding airports.' It adds that 'service may be limited or unavailable in inclement weather,' which is often a challenge for autonomous vehicles. Invitees can bring one additional guest 18 or older. Over the past couple of months, Tesla has faced pressure from the National Highway Traffic Safety Administration, which has asked the EV-maker for more information about 'the ability of Tesla's system to react appropriately to reduced roadway visibility conditions.' Texas lawmakers have requested that Tesla delay its robotaxi launch until a revision to the state's autonomous driving law takes effect in September. It will require robotaxi services to get authorization from the Department of Motor Vehicles before operating without a human driver.
Wall Street Journal
24 minutes ago
- Wall Street Journal
Fed's Waller Suggests Support for a July Cut
Federal Reserve governor Christopher Waller said the central bank could be positioned to cut interest rates at its next meeting in July, notwithstanding potential inflation pressures caused by new tariffs. In a Friday morning interview with CNBC, Waller said the Fed should 'look through' one-time price increases from tariffs and instead respond to the underlying trend in inflation, which has been cooling.
Forbes
24 minutes ago
- Forbes
The High Price Of Leadership (And Ways To Bring It Down)
Joe Altieri is the CIO at RiteScreen and the Inventor of FlexScreen, the cutting-edge innovation revolutionizing the window industry. Leadership isn't glamorous. Motivational speeches, grateful teams and energizing collaborations are a part of it— sometimes. But more often than not, leadership is like that Rolex watch—so appealing but so incredibly expensive. University of Georgia head football coach Kirby Smart shared three very wise and insightful points about leadership that I think seasoned leaders don't talk about enough and young or aspiring leaders ignore to their peril. Here's how I interpreted them: When you're in a leadership position, you're entrusted with making decisions that serve the greater good—even if that means hurting someone you genuinely like or care about. Leaders who take the easy path and let a bad situation continue because they don't want to make any waves can expect an eventual tsunami of resentment. You can get away with tipping the scales for a difficult or incompetent (but very loyal) person a few times, but it won't take long for the grumbling to start among the faithful, hardworking employees who see the injustice with striking clarity. Action Step: Stay steadfast in your decisions. Do what you can to lessen the blow for the people who will be negatively affected, but don't neglect or put off doing the right thing. The short-term discomfort is far better than the likely long-term pain of shirking your leadership responsibilities. We all want to be effective AND liked, but the reality is that someone will always be unhappy or disapprove of your decision or direction. That is unavoidable. The goal must be to base our decisions on effectiveness—not popularity. And that's harder than it seems. When I was building a company, I made choices that prioritized innovation and long-term growth. Sometimes, that meant saying "no" to things others thought would be beneficial or necessary. Some people didn't like it. Some still don't. But leadership isn't a popularity contest, and the last thing you want is a room full of "yes" people. If everyone always agrees with you, it's time to check yourself. That red flag almost always means one of two things: They're afraid to voice an opinion or have relegated themselves to the reality that it wouldn't matter anyway. In either case, the leader is missing the mark entirely. So what can you do? Surround yourself with people who understand your heart, even if they don't always agree with your decisions. Communicate clearly and often. Allow yourself to be vulnerable. People may not like your choices, but they'll most likely respect you for being consistent, honest and mission-driven. The sooner you accept that you will be misunderstood—a lot—the better your leadership journey will be. Every leader will find themselves in the hot seat regularly. The first instinct is usually to defend and protect yourself, but that's a losing long-term strategy. The people who aren't you have no idea what it actually takes to be you, and no amount of explaining will help. Of course, if you can set the record straight, do it. But don't obsess over it. Unless the misunderstanding threatens to lead to long-term team or corporate damage, let your trusted inner circle handle it while you stay focused on the main objectives. The vast majority of the dust-ups will die down quickly with very little consequence, and if you have surrounded yourself with the right people, they will let you know if your intervention is necessary. What's the action step here? Rise above the fray. Resist the urge to strike back, keep moving forward with the company agenda and remember that it is always wise to overcommunicate, especially when tensions run high. Success, progress and wins tend to naturally quiet the discord. The common saying about war and sports perfectly applies to business, too; the best defense is a good offense. Leadership costs something. It costs comfort, ease, and sometimes relationships. But remember that you're not just building "something." You're investing in and building people. You're shaping culture and moving things forward. Sure, the weight of leadership can feel like a massive burden at times, but that's when perspective is critical. So, think of it like this. We get to do something that can be life-changing for so many. We get to empower and lift others up and lead people toward their full potential. We get to make a difference and, hopefully, make the world a better place. And that, my fellow leaders, is a rare privilege that is definitely worth the cost. Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
