What Is a Rate Lock?
A rate lock is a lender's guarantee to hold a specific interest rate and point combination for a set period while your mortgage application processes. Once locked, your rate will not change regardless of market movement -- even if rates spike the next day.
Rate locks typically last 15 to 60 days, depending on your loan type and how quickly you expect to close. The lock protects you from upward rate movement, giving you certainty about your monthly payment before you sign closing documents.
At NMHL, we also offer float-down options on select programs, which allow you to benefit from a rate decrease while still being protected against increases.
Float vs. Lock
Understanding your two options
Rate Lock Periods
Choose the right lock length for your timeline
15-Day Lock
Shortest and cheapest option. Best for closings within 2 weeks where all parties are aligned and documents are ready.
30-Day Lock
The most common choice. Covers standard loan processing time and works for the majority of transactions.
45-Day Lock
For more complex transactions, new construction closings, or situations where extra time provides needed flexibility.
60-Day Lock
Extended protection for lengthy processes. Slightly higher rate, but eliminates worry about market volatility.
When to Lock Your Rate
Lock if you've found a home and are under contract
Once you have an accepted offer, locking removes one major variable from the closing process. You'll know exactly what your payment will be.
Lock if rates have been rising
In a rising-rate environment, every day you wait could cost you. Locking early protects against further increases.
Consider floating if the Fed just cut rates
After a Fed rate cut, mortgage rates sometimes continue to drift lower for several weeks. Floating briefly may capture additional savings.
Always lock if you can't afford a rate increase
If a 0.25% rate jump would push your monthly payment beyond your comfort zone, the certainty of a lock is worth more than the possibility of a better rate.
Recent Rate Volatility
Last 12 weeks of rate movement
Rate Lock FAQ
A rate lock is a lender's guarantee to hold a specific interest rate for a set period (typically 15-60 days) while your loan processes. It protects you from rate increases during that window.
Most standard rate locks (30 days or less) are free. Longer lock periods or float-down options may add 0.125% to 0.5% to your rate or closing costs, depending on the lender and market conditions.
Standard rate locks are binding. However, many lenders offer a "float-down" option that lets you take advantage of a lower rate if rates drop by a certain amount before closing. Ask about this upfront.
The best time to lock is when you have an accepted offer and are comfortable with the current rate. If rates have been rising or are volatile, locking early provides peace of mind.
If your lock expires before closing, you may need to extend it (often at additional cost) or accept the current market rate. Work closely with your loan officer to ensure your lock period covers your expected closing date.
Yes. NMHL offers float-down options on select loan programs. Your loan officer can explain the specific terms and any associated costs based on your situation.
Rate Resources
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