Mortgage Rate Lock: When Do I Lock In My Interest Rate?

It's tough to keep up with mortgage rates. They change every day, and they’ve tended to rise this year.

But once you've been approved for a home loan, you can stop your rate from increasing with a mortgage rate lock — a move that could save you thousands of dollars over the course of the loan.

Here's what you need to know about locking in a rate.

» MORE: The Fed boosts rates yet again

What is a mortgage rate lock?

A mortgage rate lock is an offer by a lender to guarantee the interest rate of your loan for a specified period of time. The lender may charge an extra fee or include the cost of the rate lock in the loan. The lock period usually extends from initial loan approval, through processing and underwriting, to loan closing.

Once locked, the loan’s interest rate won’t change — no matter what's happening with the economy — barring any changes to your application details. You’re protected from higher rates, but you won’t get a lower rate, either, unless you have the option for a one-time "float down."

Rate locks can be voided if the information provided on your application changes, such as the property appraisal, or your credit score, income or employment, or there is a revision to the loan itself, such as length or type of mortgage.

When should you lock a mortgage rate?

The time to lock in the mortgage rate is after you've shopped lenders and are approved for a home loan. That loan should have a rate you feel comfortable with and a resulting monthly payment that fits your budget.

Don't drive yourself crazy by trying to forecast mortgage interest rates, which can be up one day and down the next. Even noted economists can't predict rates with 100% accuracy because events that shape the economy and impact rates are unpredictable.

» MORE: How to get the best mortgage rate

How long can you lock in a mortgage rate?

Lock periods can be 30 days, 60 days or more for standard purchase mortgages. Construction loans have longer lock periods, such as 12 months. Select one that allows plenty of time to closing.

The average time to closing for purchase mortgages was 50 days in the last six months, according to ICE Mortgage Technology, a mortgage industry data provider.

Ask your lender the expected time to closing, and then consider building in a bit of a cushion to your rate lock period.

» MORE: How to buy a home when mortgage rates are rising

How to lock in a mortgage rate

Your mortgage lender will probably offer a rate lock after your initial loan application has been approved and before it’s submitted for underwriting, though rate lock policies vary by lender.

Ask about a rate lock if a loan advisor doesn’t mention one. Find out about available rate lock periods and whether there is a fee.