Rate locks, float-downs, and extension fees, explained

A mortgage rate lock is a real, federally disclosed commitment — but the specific dollar cost of extending it, or of a float-down option, sits outside the part of the process that's federally standardized. Knowing where that line falls is what actually protects you.

What a rate lock actually is, and what's disclosed by law

A rate lock is an agreement that fixes your interest rate for a set period — commonly 30, 45, or 60 days — while your loan moves through processing and underwriting, protecting you from a rate increase during that window. Under 12 CFR § 1026.37(a)(13) (part of the TRID rule — see our full TRID explainer), your Loan Estimate has to include an interest rate lock section stating whether your rate is locked, and — if it is — the date and time the lock expires, whether the rate could still increase after locking under any circumstance, and whether a penalty applies if the loan doesn't close before the lock expires. If your rate isn't locked yet, the Loan Estimate has to say so plainly rather than implying a rate that isn't actually secured.

What isn't federally standardized: extension and float-down pricing

Once your rate actually gets locked — which can happen days or weeks after your initial Loan Estimate — the lender has to issue a revised Loan Estimate within 3 business days reflecting the locked terms. But neither TRID nor any other federal rule requires a standardized disclosure of exactly what a lock extension will cost if your closing runs past the lock expiration date, or what an optional float-down provision costs to add. Those figures are set by each individual lender's own pricing and aren't captured in the federally mandated lock-status disclosure the way the expiration date and non-closing penalty are.

Extension fees: what actually happens if your closing runs long

If a rate lock expires before your loan actually closes, a lender will typically offer an extension (usually priced per day or in blocks of days), a full relock at current market pricing, or, in some cases, "worse-of" repricing that takes whichever rate is less favorable to you. A documented friction point worth knowing about directly: an extension fee can apply even when the delay causing it originated on the lender's own side (slow underwriting, a documentation backlog) rather than anything you did — which is exactly why asking, in writing, who bears the cost of a lender-caused delay before you sign is worth doing at the start, not after your lock has already expired.

Float-downs: an optional, priced add-on, not a standard feature

A float-down provision gives you a one-time option to move to a lower rate if the market rate drops after you've already locked — genuinely useful in a falling-rate environment, but not a feature every lender offers, and not free where it is offered. Typical float-down pricing runs roughly 0.125% to 0.50% of the loan amount, charged either as an upfront fee or built into a modestly higher starting rate compared to a lock without the option. Whether a specific lock includes it, and what it actually costs, is negotiated and disclosed lender-by-lender — not a standardized federal form field.

What to actually get in writing

Before locking, ask for, and keep, written answers to three specific questions: the exact lock expiration date and any non-closing penalty (which should already appear on your Loan Estimate); the extension fee schedule and whether it applies if the delay is the lender's own doing; and whether a float-down option exists, what it costs, and how it's triggered. All three are legitimate, normal parts of a mortgage transaction — the issue is only ever a lender who won't put the actual numbers in writing before you're locked in.