How does a mortgage rate lock work?
Rob Miller explains what a mortgage rate lock is, how long locks last, what it costs to extend one, and when floating makes sense for Wisconsin buyers.
Rob Miller, Branch Manager at MadCity Home Loans, explains the rate lock — and why it matters more than most buyers realize.
How does a mortgage rate lock work?
A rate lock is a lender's guarantee that your interest rate will not change between the time you lock and the time your loan closes — regardless of what happens in the broader market during that window.
When Can You Lock?
You can typically lock once you have a signed purchase contract. We can't lock a rate before then because there's no guaranteed closing date. The moment you're under contract, I recommend talking about locking right away.
Lock Periods
- 15–30 days: Fastest closing, lowest lock cost — but tight. Best for all-cash-out refinances or deals with no contingencies.
- 45 days: The most common for purchase loans in Wisconsin. Gives enough runway without unnecessary cost.
- 60–90 days: Used for new construction, delayed closings, or complex files. Longer locks cost slightly more (typically 0.125–0.25% of the loan amount added to the rate).
What Happens If the Lock Expires?
If closing is delayed past the lock expiration, we have two options: pay an extension fee (usually cheap — a few hundred dollars for a 7-day extension), or relock at current market rates. I proactively monitor every lock in my pipeline and alert you well before expiration.
Float vs. Lock
"Floating" means we wait to lock and gamble on rates improving. I only recommend floating when there are strong market indicators pointing toward a rate drop within days. For most buyers, the certainty of a locked rate outweighs the speculative upside.
Related Guide: Learn more about the pre-approval and closing process in our Mortgage Pre-Approval Guide.