A mortgage rate lock is an agreement between a borrower and lender to secure an interest rate on a mortgage for a set period of time.
How the rate lock works in practice will vary among lenders, loan terms, different types of mortgages, and geographic locations.
If you don’t lock in a rate, it can change at any time. An uptick in interest rates would translate to a higher monthly mortgage payment.
Float-down policies vary by lender but generally cost more than a conventional rate lock for the added flexibility and assurance.