Loans
Lock-In
An agreement with your lender to hold a specific interest rate for a set period — typically 30 to 60 days — while your loan is processed. A rate lock protects you from rate increases during that window. If rates drop after you lock, you generally cannot get the lower rate unless your lock includes a float-down option. Lock your rate when you are comfortable with it and confident your loan will close within the lock period.
Why It Matters
Lock-In is a concept every mortgage borrower should understand before signing loan documents. The terms of your mortgage — including factors like lock-in — directly determine your monthly payment, total interest paid, and financial flexibility for the next 15-30 years. Taking time to understand these terms puts you in a stronger negotiating position with lenders.
When evaluating loan offers, ask your lender to explain how lock-in affects your specific loan scenario. Get it in writing on your Loan Estimate form, and compare how different lenders handle lock-in — the differences can save or cost you thousands over the life of your mortgage.
Real-World Example
For a typical $300,000, 30-year mortgage at 6.5%, understanding lock-in can help you evaluate whether you're getting the best possible terms. Even small variations in loan terms translate to significant dollar amounts over 360 monthly payments.
Pro Tip
Before your loan closes, make sure you fully understand how lock-in works in your specific mortgage. Ask your loan officer to walk through it — they're required to explain every term on your Closing Disclosure.