A downside, for the borrower, is a mortgage rate lock would prevent them from taking advantage of lower rates that may occur during the lock period.
Conversely the lender cannot take advantage of rises in interest rates.
The longer the period is could mean a higher interest rate is agreed upon.16 Aug 2019
Should you lock in your mortgage interest rate?
A mortgage rate lock is an offer by a lender to guarantee the interest rate of your loan for a specified period of time, and you may have to pay a fee for it. A rate lock protects you from higher rates, but you won’t get a lower rate, either, unless you have the option for a one-time ‘float down.’29 May 2018
When should you lock in your mortgage rate?
Get the timing right
Since locks typically last for 60 days at most, it’s important to set your locked-in rate within 60 days of your mortgage loan getting finalized. Lock too early, and you could wind up having to extend — and pay more. Homebuying can take weeks or even months.18 Jun 2019
What does it mean to lock in your mortgage rate?
A lock-in or rate lock on a mortgage loan means that your interest rate won’t change between the offer and closing, as long as you close within the specified time frame and there are no changes to your application. Rate locks are typically available for 30, 45, or 60 days, and sometimes longer.4 Aug 2017
Is a 10 year mortgage a good idea?
Advantages of a 10-Year Fixed Mortgage
10-year rates are lower than 30-year fixed rates. Great to lock in safe, consistent and stable rate if rates are low. Build up equity at a faster rate than a longer loan term. Save lots of money in interest because the lifetime of the loan is shorter.