Locking in an interest rate before closing.
A rate lock is the lender's commitment to honor a specified interest rate for a defined period (typically 30–90 days) until the loan closes. Rate locks protect borrowers from rate increases during the underwriting process and give the closing schedule predictability.
Rate locks exist because mortgage rates change daily — sometimes meaningfully within a single week. Without a rate lock, the borrower's final rate would be whatever the market is on closing day, creating massive uncertainty. The rate lock removes that risk by guaranteeing today's quoted rate (or current rate at lock time) for a defined window.
Lock periods vary by transaction type. 30-day locks are standard on residential purchases and refinances. 45–60 day locks are common when closing timelines are longer. 90-day locks are used on construction loans and commercial transactions with extended underwriting. Longer locks typically cost more in rate (5–15 bps per additional 15 days).
Float-down provisions are sometimes available. Some lenders offer a one-time opportunity to re-lock at a lower rate if market rates fall significantly during the lock period. This gives borrowers downside protection (lock cap) without sacrificing upside if rates improve. Float-downs typically cost 25–50 bps in the original lock price.
If the lock expires before closing, the borrower has options. Extend the lock for an additional cost (typically 5–10 bps per week of extension). Re-lock at current market rate, which is fine if rates have fallen but punishing if they've risen. Reprice the loan entirely if the deal has materially changed. Most lenders work with borrowers to manage these scenarios — rate lock expiration is one of the most common closing-week problems.
| Loan amount | $485,000 |
| Current market rate | 7.25% |
| Lock period options: | |
| 30-day lock @ 7.25% | (standard) |
| 45-day lock @ 7.30% | +5 bps |
| 60-day lock @ 7.40% | +15 bps |
| Float-down provision @ 7.40% + 25 bps | (re-lock once if rates fall ≥25 bps) |
| If closing slips beyond lock: | |
| Extension cost (per week) | ~5 bps each |
| Re-lock at current market | Could be better or worse |
The lender's commitment to honor a specified interest rate for a defined period (typically 30–90 days) until the loan closes. Protects the borrower from rate increases during underwriting.
Generally as early as practical once the loan is approved and the closing date is scheduled. Locking too early risks expiration; locking too late risks rate increases.
Typically 5–15 bps per additional 15 days. A 60-day lock might cost 10–25 bps more than a 30-day lock. The extra cost is the lender's cost of hedging the rate exposure for longer.
Three options: extend the lock (costs typically 5–10 bps per week), re-lock at current market rate (better or worse depending on rate movement), or reprice the loan entirely.
A one-time opportunity to re-lock at a lower rate if market rates fall significantly during the lock period. Typically costs 25–50 bps in the original lock price.
Matrix offers 30, 45, and 60-day rate locks priced competitively. Float-down options available on select programs.
