How Mortgage Rate Locks Work
When you apply for a mortgage and receive an offer, the rate quoted is typically held for a set period — usually between three and six months. This means that even if the lender increases their rates during that time, your offered rate remains the same. You've effectively 'locked in' that rate.
Rate locks are particularly valuable in rising rate environments. If the Bank of England raises the base rate or market conditions change while your application is being processed, your locked rate protects you from paying more. The lock period starts from when your offer is issued, not when you first applied.
How Far in Advance Can You Lock a Rate?
Many UK lenders now allow you to apply for a remortgage and lock in a rate up to six months before your current deal expires. Some even offer longer lock periods. This means you can start the process early, secure a competitive rate, and have your new deal ready to go when your current one ends.
The advantage of applying early is that you get the best of both worlds: if rates fall before completion, some lenders let you switch to their lower rate. If rates rise, you keep the rate you locked in. Not all lenders offer this downward flexibility, so ask about their policy before applying.
What Happens If Rates Change During the Lock Period
If rates rise during your lock period, your locked rate stays the same — that's the whole point. You benefit from the security of knowing exactly what your payments will be.
If rates fall, the situation depends on the lender. Some lenders operate a 'rate drop' policy, allowing you to switch to the lower rate at no cost. Others will hold you to the rate you originally locked in. A few let you withdraw your application entirely and reapply at the new rate, though this means starting the process again. Ask your lender or broker about their policy before committing.
Tips for Making the Most of Rate Locks
To get the best value from a rate lock:
- Start early: Apply four to six months before your current deal expires to maximise your lock period
- Ask about rate drop policies: Lenders that allow you to drop to a lower rate give you the best of both worlds
- Don't wait for the 'perfect' rate: Trying to time the market is risky — a good rate today is better than a gamble on tomorrow
- Keep your application moving: Provide documents promptly to ensure the offer is issued before the lock window closes
Remember that even the most generous rate lock eventually expires. If your remortgage takes longer than expected and the offer expires, you may need to reapply at whatever rates are available at that point.
Important: Your home may be repossessed if you do not keep up repayments on your mortgage. There will be a fee for mortgage advice. The actual rate available will depend on your circumstances. Think carefully before securing other debts against your home.