Business LoansAccounts Style 02Car LoansCareersCheckingCredit CardsDigital BankingAccounts Style 01Home Equity LoansInsuranceInvestingMembershipMortgagePersonal LoansRV, Boat, Motorcycle LoansSavings
Skip to main content
Back to Mortgages

Mortgage Rate Lock Explained

Featured Image
A woman moving into her home

There are a lot of uncertainties when you buy a home. Which offer will be accepted? What will the weather be on moving day? And most importantly, for your mortgage, what will your interest rate be? So, how do you navigate a fluctuating interest rate when you're shopping for a home?

You've heard the phrase "locking in your rate," but what does that mean? And when should you lock in your rate rather than float it? The jargon, options, and specifics of home financing can make the process intimidating. We're here to break it down and give you the confidence to help make the right decision that works for you.

What is a Rate Lock?

Let's start with the basics. A Rate Lock is an agreement from a mortgage lender to hold a specific mortgage interest rate for a particular period, even if rates rise. There are typically four elements* to a rate lock.

  • Interest rate – your interest rate depends on the market conditions on the date you choose to lock.
  • Points funds paid to get a lower interest rate.
  • Lock period how long the agreement will be valid.
  • Loan product what type of mortgage the agreement applies to.

*These elements should be clearly shown on the confirmation you receive once you notify the lender that you want to lock in your rate.

When should you lock in your rate?

Unfortunately, there's no crystal ball for predicting interest rates and the surrounding market. Luckily, at Virginia Credit Union, there are several points in the mortgage process when you can use a Rate Lock to gain confidence in an uncertain market. One typical time to lock in your rate is when we receive your application. Others choose to lock in during the loan processing, and you can wait up to 10 business days before your loan closing.

You can even lock in a rate before you select a property with our Lock & Shop program. Through this program, you can shop with confidence and peace of mind, locking in your interest rate for up to 360 days.

Talk to a mortgage loan officer to partner on the right Rate Lock for you.

What does it mean to float down your rate?

When you float a loan, you haven't yet secured a lender's quoted interest rate. Floating means you're willing to take the risk that interest rates will either not go up or that they will fall before you close your loan. To further confuse the term, some lenders also offer a "float-down option" with a mortgage rate lock-in, meaning you've locked in your rate, but if the rates drop a certain amount, you have the option to get that lower rate, often for a fee. Talk to your loan officer to learn if this option applies to your loan process.

The uncertainty of the housing market can be stressful, but by locking in your interest rate, you'll have one less thing to worry about. With a Mortgage Rate Lock, you can shop with confidence and take your time finding your next dream home.


Whether you're buying your first home or refinancing a current mortgage, Virginia Credit Union is there at every step.