What is a float-down option?

A float-down option lets you lock your rate but still get a lower rate if rates drop before closing. It typically costs 0.25-0.5% of the loan amount and requires rates to drop by a minimum amount (usually 0.25-0.5%). Not all lenders offer this, and terms vary significantly.

How long can I lock my mortgage rate?

Rate locks typically range from 15 to 60 days, with 30-45 days being most common. Longer locks (60-90 days) are available but usually cost more (higher rate or fees). If your closing is delayed, you may need to pay for a rate lock extension.

When to Lock Your Mortgage Rate 2025: Float vs Lock Strategy Explained

Q: When should I lock my mortgage rate?

Lock when: (1) you have an accepted offer and are comfortable with the rate, (2) rates are rising or volatile, (3) you're risk-averse and want certainty, or (4) you're within 30-45 days of closing. Most experts recommend locking once you have an accepted offer rather than gambling on rate movements.

What Is a Mortgage Rate Lock?

A rate lock is a lender's promise to hold a specific interest rate for you for a set period (usually 30-60 days) while your loan is processed. It protects you from rate increases but also prevents you from benefiting if rates drop.

✅ What a Lock Guarantees

• Your interest rate won't increase
• Your points/fees are fixed
• Protection from market volatility
• Peace of mind during closing

❌ What a Lock Doesn't Do

• Doesn't let you benefit from rate drops
• Doesn't guarantee loan approval
• Doesn't extend automatically
• Doesn't transfer to other lenders

Lock vs Float: The Complete Comparison

Factor	🔒 Lock	🎲 Float
Rate Protection	✅ Protected from increases	❌ Exposed to increases
Benefit from Drops	❌ Miss out on drops	✅ Can get lower rate
Stress Level	Low - rate is set	High - watching rates daily
Best When	Rates rising/volatile	Rates clearly falling
Risk Level	Low	High

💡 The Expert Consensus

Most mortgage professionals recommend locking once you have an accepted offer.Trying to time the market is gambling. A 0.125% rate difference on a $400K loan is only $25/month—not worth the stress and risk of rates spiking 0.5%+.

🔒 When to Lock Your Rate

1. You Have an Accepted Offer

Once your offer is accepted, you have a closing date. Lock to ensure your rate doesn't change before then.

2. Rates Are Rising or Volatile

If rates have been climbing or swinging wildly, lock to protect yourself from further increases.

3. You're Happy with the Current Rate

If the rate fits your budget and you'd be upset if it went up, lock it in.

4. Major Economic News Is Coming

Fed meetings, jobs reports, and inflation data can swing rates. Lock before uncertainty.

5. You're Risk-Averse

If watching rates daily would stress you out, just lock and move on with your life.

📊 See Today's Rates Before You Decide

Compare rates from multiple lenders to make sure you're getting the best deal before you lock.

Compare Rates from 300+ Lenders →

🎯 The Float-Down Option: Best of Both Worlds?

A float-down option lets you lock your rate but still get a lower rate if rates drop before closing. It's like insurance against missing out on rate drops.

How Float-Down Works:

1. You lock your rate (e.g., 7.0%)
2. You pay for float-down option (0.25-0.5% of loan, or ~$1,000-$2,000)
3. If rates drop by minimum amount (usually 0.25-0.5%), you get the lower rate
4. If rates don't drop enough, you keep your original locked rate

✅ Float-Down Pros

• Protection from rate increases
• Can still benefit from drops
• Peace of mind
• Good in uncertain markets

❌ Float-Down Cons

• Costs money upfront
• Minimum drop required
• Not all lenders offer it
• Complex terms vary by lender

⏱️ How Long Should Your Rate Lock Be?

Lock Period	Best For	Rate Impact
15 days	Cash buyers, fast closings	Lowest rate
30 days	Standard purchases	Standard rate
45 days	Most common, safe buffer	+0.125% typical
60 days	New construction, complex deals	+0.25% typical
90+ days	New construction	+0.375%+ typical

💡 Pro Tip

Add 5-10 days buffer to your expected closing date. If closing is delayed and your lock expires, you'll need to pay for an extension (typically 0.25% per week) or re-lock at current rates.

Frequently Asked Questions

When should I lock my mortgage rate?

Lock when you have an accepted offer and are comfortable with the rate. Most experts recommend locking rather than gambling on rate movements. If rates are rising or volatile, lock immediately.

What happens if rates drop after I lock?

Without a float-down option, you're stuck with your locked rate. With a float-down, you can get the lower rate (minus restrictions). Some buyers break their lock and switch lenders, but this involves fees and delays.

How much does a rate lock cost?

Standard 30-45 day locks are usually free. Longer locks or float-down options cost extra (0.25-0.5% of loan amount). Lock extensions if you miss your closing date typically cost 0.25% per week.

Can I lock before I find a house?

Some lenders offer "lock and shop" programs that let you lock before finding a home. However, these often have restrictions and may cost more. Most buyers lock after their offer is accepted.

🏠 Ready to Lock In Your Rate?