How Long Can You Lock in a Mortgage Rate?

Mortgage rates took center stage in financial headlines in 2022 after rising to highs not seen in decades. 

Mortgage interest rates were at record lows during the depths of the coronavirus pandemic of 2020 and 2021 but began spiking in 2022 as the Federal Reserve raised interest rates in an effort to halt escalating inflation. According to Freddie Mac, in August of 2021 rates for a 30-year fixed mortgage bottomed out at 2.77 percent. By October of 2022, however, that same mortgage had skyrocketed to 7.08 percent.1 

High mortgage rates affect homeowners’ monthly mortgage payments by making it more expensive to borrow money. Using the numbers given above, a $500,000 mortgage at 7 percent would have a $3,327 monthly payment, while borrowing that same amount at 2.77 percent would come with a $2,047 monthly payment. 

Mortgage interest rates are also significant because they affect the home-buying process – borrowers can qualify for more expensive homes when interest rates are lower. Locking in mortgage rates is a strategy many homeowners use to prevent interest rates from rising in the time it takes between bringing a home under contract and closing on the loan. There are limits to lock periods, though. Here’s an overview of how long you can lock in mortgage rates. 

What is a Mortgage Rate Lock? 

Mortgage interest rates have crept down in 2023 and are inching closer to the 6-percent mark. That’s significant for potential homeowners because every little percentage point makes a difference in borrowers’ monthly mortgage payments and the amount of home they can afford to purchase. 

Locking in a mortgage rate occurs when homeowners pre-qualify for a home loan with their preferred lender and pay a small fee to lock in the current rate. The lock – sometimes referred to as mortgage rate protection – is a guarantee from the lender that the mortgage rate offered to the borrower in the prequalification process won’t change regardless of any broader movements in the consumer lending industry, such as an additional rate hike by the Federal Reserve. 

The rate lock freezes the mortgage interest rate, allowing homeowners to calculate exactly what their loan terms will be as they move through the home-buying process. The lock will be in place when they put an offer on a home, and it should continue all the way through escrow to the final closing date. If mortgage rates happen to dip while the mortgage lock is in place, borrowers can’t benefit from the change unless their mortgage lock agreement includes a float-down option. This contractual clause allows borrowers to access lower interest rates despite having a lock in place. 

How Long Does a Mortgage Lock Remain in Place? 

Typically, mortgage rate locks last between 30 and 60 days. However, a lock can last as long as 90 or even 120 days in some circumstances – it all depends on the lender. It typically costs more to lock in mortgage rates for extended periods. Additionally, borrowers who need more time to find a house or navigate the purchase process can usually pay a fee to extend their rate protection. 

Keep in mind that a rate lock doesn’t mean you are locked into using one particular lender. If you are pre-qualified with multiple lenders, you are free to switch lenders during the purchase process if you can secure better loan terms, such as a lower mortgage interest rate or lower closing costs. You’ll have to weigh any potential benefits against the hassle and possible expenses associated with starting over with a new lender.  

Putting it all Together 

Borrowers can use a mortgage rate lock to lock in the current interest rate offered by a preferred lender so they won’t have to worry about rates rising as they work to close the loan on their home. Rates typically can be locked for 30 to 60 days, but borrowers can extend the lock or purchase a longer lock term as needed. 

If you have any additional questions about the rate lock process, consult with your loan officer about their financial institution’s lock terms, conditions, and lengths.