Quick answer: Lock the mortgage rate when the available pricing, payment, and cost fit your plan and the lock period can reasonably cover the remaining time to closing. Waiting may produce a better rate, but it also creates the risk that pricing gets worse.
What does a rate lock do?
A rate lock generally protects agreed mortgage pricing for a defined period while the loan is processed, subject to the loan terms and required closing timeline. Common lock periods can vary, and longer locks may cost more than shorter ones.
Match the lock to the closing timeline
The period should leave enough time for the appraisal, title work, underwriting, conditions, final approval, required disclosures, and closing. A lock that expires immediately before closing can lead to extension charges or repricing.
Questions to ask before locking
- How long is the lock?
- Are points or lender credits included?
- What happens if closing is delayed?
- Who pays for an extension?
- Does the lender offer a float-down if rates improve?
- What loan or property changes could cause repricing?
Should you wait for the market?
No one can reliably call the lowest rate in advance. The practical decision is whether today’s locked payment works and whether you can tolerate the cost if rates rise while waiting. Compare the potential savings from a small improvement with the budget impact of an equally possible increase.
See how to compare rates, points, and lender credits and why actual rates differ from advertisements.
A rate is not protected until the lender confirms the lock. Terms and extension policies vary.