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Mortgage interest rates remain volatile, and for homebuyers, a mortgage rate lock could mean paying thousands of dollars less over the life of a loan. While timing plays a role in securing the lowest possible mortgage rate, experts say preparation and a clear understanding of how rate locks work matter more than trying to outguess the market.
As of December 16, 2025, the average rate on a 30-year fixed mortgage was 6.12%, almost a full point below this year’s January peak. Still, economists warn that waiting for rates to fall further can be a mistake. “Locking now protects against further increases and provides certainty, while trying to time the market can expose borrowers to unexpected and potentially costly rate movements,” says Dr. Timothy Savage, a clinical assistant professor at the NYU Schack Institute of Real Estate.
Before locking in any current mortgage rate offer, however, it helps to know what you’re getting involved with. Below, we’ll break down the mortgage rate items to know to better inform your next steps.
See how low your current mortgage rate offers are here.
What to consider about mortgage rate locks now
When you’re approved for a mortgage to buy a home, your lender may offer the option to lock your mortgage interest rate for a limited period (usually between 30 and 60 days). This allows you to maintain one rate before reaching the closing table. These are the two primary ones to consider:
Standard rate lock
“A rate lock is one of the strongest forms of protection a borrower has in a volatile interest-rate environment,” says Marc Halpern, CEO of Foundation Mortgage. Instead of a fluctuating rate, your rate stays the same. “When you lock, you’re essentially telling the lender, ‘Hold this rate for me while my loan goes through underwriting,'” Halpern says.
However, if rates fall, it could backfire. “If rates fall, you are stuck with the rate you locked upfront, unless your lender has a rate renegotiation policy and rates have dropped far enough to trigger that rate renegotiation policy,” says David Chandler, mortgage lender for Movement Mortgage.
Once the 30 to 60 days are up, your lender may extend the lock by the number of days needed to close, but that extension isn’t free of charge. Chandler says extending a lock typically costs 0.125% of the loan amount for every 5-10 days the rate needs to be extended. That could quickly erase any savings you were expecting if closing negotiations run long.
Learn more about your current mortgage rate lock options now.
Float down
A standard mortgage rate lock isn’t the only option. A float-down rate lock option lets you secure a lower rate if mortgage interest rates drop after you lock in. If you’re interested in this option, you have to request it. Chandler shared that some lenders offer this if rates drop by a specific margin (e.g., 0.25%). Others will charge an upfront fee ranging from 0.25% to 1% of the loan amount.
Securing the lowest possible mortgage rate
Locking in your rate is just one step you can take to shave off extra interest from your mortgage. To get the lowest rate, you’ll need to focus on your down payment, credit history, loan structure and debt-to-income (DTI) ratio. Take these steps in addition to locking your rate to secure the lowest mortgage rate possible:
- Save toward a larger down payment. A down payment of 20% or more lowers risk to the lender, eliminates private mortgage insurance (PMI) and could lower your interest rate.
- Clean up your credit history. You and any co-borrowers should review your credit history and address problem areas to qualify for the most competitive rates.
- Lower your debt-to-income ratio. Reduce or pay off debts in total to effectively lower your DTI.
- Compare loan structures. Compare the price breakdown and interest rate for other mortgage structures like a conventional, FHA, or a 15-year mortgage to find the best rate.
- Avoid new credit applications. New credit applications can be a red flag to lenders and can potentially lower your credit score when you need it to be as high as possible.
How market timing and Fed expectations affect rates
Mortgage rates are driven by multiple factors besides the Federal Reserve, including the 10-year Treasury yield. Those yields respond quickly to investor sentiments, Federal Reserve comments and other data points. So even if the Federal Reserve announces a rate cut, it doesn’t always equal a drop in mortgage rates.
As you’re planning when to lock in your mortgage rate, you’ll want to consider mortgage rate trends and potential closing delays. “I always tell clients that mortgage rates tend to take the elevator up and the stairs down,” says Chandler. “If you float and news breaks like a hot inflation report, rates can jump dramatically. It often takes weeks of good news for rates to drop that same amount.”
Because of that imbalance, Chandler generally guides clients on the borderline of qualifying to lock a rate sooner if they’re closing within 30 days and can afford today’s payment.
“I typically suggest clients lock up front. This is especially true if an increase in interest rates would potentially keep them from qualifying for the home. The risk of a rate hike disqualifying someone outweighs the benefit of a small dip.”
The bottom line
Sudden market moves can be the enemy of a low mortgage rate unless you lock it in. Even though this option guarantees your rate within a certain timeframe, it’s not without its drawbacks. Locking in at the wrong time means you could miss out on a lower rate or encounter costly delays in the closing process. Ultimately, securing the lowest rate depends more on preparation than prediction since there are far more factors like credit history, down payment, DTI ratio, and loan structure that fall within your control.
