Mortgage rate lock: What it is and when to lock

What is a mortgage rate lock?

“Mortgage interest [rates] can change every day and sometimes even multiple times a day, so we always recommend that borrowers lock in their rate,” says Richard Greene, branch manager and loan officer at New Mexico Mortgage Company in Albuquerque. Generally speaking, rates also tend to increase when the economy does well, and slump during downturns to encourage growth. Mortgage rates can react to volatility, as well, such as the series of regional bank failures in 2023.in mortgage rates, too. When the Fed raises its key borrowing rate, the rates on adjustable-rate mortgages and home equity lines of credit follow suit.

If you lock too early, however, you might end up exceeding the expiration date and facing extension fees or a new rate. So, if you’re just starting to look at properties, it might not be wise to opt for a rate lock just yet — you’ll want to avoid feeling rushed to find a place and close the loan.

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