Mortgage Rate Lock Explained: When Is the Right Time to Lock In?
If you’re buying a home or refinancing, one of the most important decisions you may face is when to lock your mortgage rate. Locking at the right time can save you thousands over the life of your loan — but with interest rates constantly shifting due to inflation, market trends, and Federal Reserve decisions, it’s not always easy to know when to commit.
What Is a Mortgage Rate Lock?
A mortgage rate lock is a lender’s guarantee to hold your interest rate for a specific period (typically 30, 45, or 60 days) while your loan is processed. This can protect you from potential rate increases during that time, even if the market fluctuates.
Rate locks may offer peace of mind, especially in uncertain economic environments. But because they have expiration dates, the timing of your lock matters.
When Should You Lock Your Mortgage Rate?
Here are four common scenarios when locking your rate makes sense:
- You’re Under Contract on a Home
Once you’ve signed a purchase agreement, locking your rate becomes a key next step. Most buyers secure their rate soon after going under contract to avoid unexpected changes to their monthly payment. - Rates Are Trending Up
If interest rates have been rising or are expected to rise based on economic reports or Fed announcements, it may be smart to lock sooner rather than later to avoid paying more over time. - The Rate Works for Your Budget
If you’ve found a rate that aligns with your financial goals, locking it in can help you stay on track. Holding out for a slightly better rate may end up costing more if the market shifts against you. - You’re Refinancing and Ready to Close
For refinancing, locking your rate once your application is finalized and closing is in sight can help protect against last-minute surprises.
Should You Lock or Float?
Some borrowers choose to “float” their rate, waiting to see if rates improve before locking in. While this strategy can pay off in a falling-rate market, it also carries risk. If you decide to float, work closely with your Guardian loan officer to set a firm timeline or rate target and keep a close eye on the market.
Can You Extend a Rate Lock?
Yes! Rate lock extensions may be available if delays push your closing beyond the lock expiration date. Keep in mind that extensions can come with a fee or a slightly higher interest rate, so it’s best to stay on schedule and maintain good communication with your lender.
How Guardian Savings Bank Can Help
At Guardian Savings Bank, our experienced loan officers work closely with you to help choose the right time to lock your mortgage rate, based on current market conditions, your financial goals, and your homebuying timeline.
Have questions about locking your mortgage rate?
Contact a GSB Loan Officer today to take the guesswork out of your home financing. Call us at 855-912-6625 or visit your nearest branch. We’re here to help you make smart, confident decisions every step of the way.