Short-Term Rate Lock vs. Extended Rate Lock
Standard rate locks typically cover a few weeks to a couple months, but buyers with longer timelines — like new construction — sometimes need an extended lock, which usually comes at an added cost.
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Short-Term Rate Lock
A rate lock covering the lender's standard window, generally enough for a typical resale home closing timeline.
- Usually included at no added cost within standard underwriting timelines
- Matches the typical closing timeline for most resale purchases
- May not cover longer timelines like new construction builds
- Requires an extension, often at a cost, if closing gets delayed
Extended Rate Lock
A longer rate lock, often used for new construction or other extended timelines, covering several months but typically at an added upfront cost.
- Protects against rate increases over a much longer construction or closing timeline
- Avoids scrambling for a costly extension later
- Meaningfully higher upfront cost than a standard short-term lock
- If rates fall significantly, you're often still locked at the higher rate without a float-down
Which one makes sense for you?
For a typical resale purchase, a standard short-term lock usually covers the closing timeline without added cost. For new construction or other extended timelines, an extended lock can be worth the added cost to protect against rate increases over a multi-month build, especially in a rising or volatile rate environment.
Key cost factors.
- Expected timeline to closing, especially for new construction
- Cost of the extended lock versus the risk of rates rising
- Whether a float-down option is available if rates improve
- Builder's own timeline reliability and history of delays
Before you decide.
- What's the realistic timeline to closing, including likely construction delays?
- What does an extended lock cost compared to the risk of rates rising in that window?
- Is a float-down option available with this extended lock?
Frequently asked questions.
What happens if my new construction home finishes early or late?
If it finishes outside your locked window, you may need to extend the lock at an added cost, or in some cases relock at the then-current market rate, so it's worth discussing contingency plans with your lender upfront.
All figures on this page are illustrative examples for general education, not quotes, appraisals, or guarantees of actual pricing. Actual costs vary by provider, location, project scope, and market conditions — always get a specific quote before making a purchasing decision.
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