Ask the expert: What is a mortgage rate lock?

A mortgage rate lock freezes your interest rate after your loan is approved until the loan is closed.

Rate locks can be useful in times of rising interest rates. If interest rates rise, you are protected at a lower rate.

Of course, every single month, interest rates ping-pong up and down somewhat, but if you are afraid mortgage rates will jump in the period between your loan approval and closing, a rate lock could at least give you peace of mind. Some lenders offer them, and others don’t.

Rate locks are not free — even if you aren’t directly charged for them. Some lenders might offer a free rate lock, but the cost is mixed into your rate.

Direct fees for rate locks vary quite a bit. Some lenders will calculate the charge based on basis points, and the lock is only good for a certain amount of time. For example, a rate lock fee of $500 would not be unusual for a $200,000 loan.

Rate locks can span periods of 30 to 60 days for conventional mortgages. If you pay for one, promptly answer requests for information. You don’t want any delays in processing or underwriting.

One warning: Ensure the information on your application is correct and your financial position doesn’t change. If your credit score drops or you lose your job or income, your rate lock could be voided. Also, if you change your mind about the terms of the loan (length of time or type of mortgage), the lock could be voided.