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Navigating Mortgage Rate Changes: Locked-In Rates and Potential Savings


Securing a mortgage is a significant financial decision, and one of the most critical factors is the interest rate. When you lock in a mortgage rate, you're making a commitment to a specific rate for a defined period. But what happens if mortgage rates drop after you've locked in? In this blog post, we'll explore whether you can get a lower rate if mortgage rates decrease during your locked-in period and what options might be available to you.

Understanding Locked-In Mortgage Rates
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When you lock in a mortgage rate, you're essentially entering into an agreement with your lender. This agreement guarantees that the interest rate you've locked in will remain unchanged for a specified period, usually ranging from 15 to 60 days. This provides stability and protects you from potential rate increases during the home loan processing period.

Can You Get a Lower Rate if Mortgage Rates Drop?

The possibility of obtaining a lower rate after locking in depends on various factors:

Rate Float Down Option: Some lenders offer a 'rate float down' option. This means that if interest rates drop significantly during your rate lock period, you may have the opportunity to lower your locked-in rate to match the new, lower rate. However, this option might come with specific conditions, fees, and limitations.

Lender Policies: Lenders have different policies regarding rate adjustments after locking in. Some might allow adjustments under certain circumstances, while others might have stricter guidelines.

Market Conditions: If mortgage rates drop due to favorable market conditions, it could prompt lenders to be more flexible in offering rate adjustments.

Rate Protection Features: Some mortgage programs come with rate protection features that automatically adjust your rate downward if market rates decrease significantly.

Options to Consider

Rate Float Down: If your lender offers a rate float down option, review the terms and conditions carefully. It's important to understand any associated fees and limitations before deciding to proceed.

Negotiation: Even if a formal rate float down isn't available, you can still communicate with your lender. If market rates have significantly decreased and you're still within your rate lock period, you might be able to negotiate a lower rate based on the current market conditions.

Refinancing: If you've already closed on your mortgage and mortgage rates drop significantly afterward, you might consider refinancing your loan. Refinancing involves applying for a new loan with a lower interest rate to replace your existing mortgage. However, this option involves closing costs and a new loan approval process.


While locking in a mortgage rate provides stability and protection against rate increases, there are scenarios in which you might be able to take advantage of lower rates if they drop during your locked-in period. If you're considering this possibility, it's crucial to communicate with your lender, understand their policies, and explore the available options. Keep in mind that the specifics of each situation can vary, so working closely with your lender and staying informed about market trends will help you make the best decision for your financial situation. Whether you explore rate adjustments, refinancing, or simply proceed with your locked-in rate, understanding your options empowers you to make informed choices on your homeownership journey.

Can mortgage rates change after I've locked in?


Frequently asked questions (FAQs) related to bank mortgage rates

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*CD Rates are subject to change without notice and may vary from bank to bank and branch to branch. Please contact your local bank for updated bank CD rates.