An agreement with your lender to hold your interest rate at a specific level for a set period (often 30-60 days), protecting you if rates rise before you close.
A rate lock is the lender's commitment to honor a specific interest rate for a defined period — usually 30, 45, or 60 days. Once you lock, rate moves in the market don't affect your loan. If rates go up before closing, you're protected. If they go down, you're stuck unless you negotiate a float-down.
When to lock: as soon as you're under contract on a home and confident you'll close, typically. Locking earlier than that has risk — if your purchase falls through, you may have wasted a lock and even paid a fee.
Locks longer than 60 days usually cost more, either as a fee or as a slightly higher rate. Some lenders offer float-down options that let you re-lock at a lower rate if the market drops significantly before closing — typically for a fee or a small rate premium upfront.
Example
You go under contract on May 1 with closing scheduled for June 15. You lock your rate at 6.5% on a 45-day lock. Rates rise to 7% in early June, but your loan still closes at 6.5%. If rates had dropped to 6.25%, you'd be stuck at 6.5% unless you negotiated a float-down.
Also known as
rate lock, interest rate lock, lock-in
Source:
CFPB