When mortgage rates drop after you've locked, you have two mechanical paths to a lower rate: re-locking or exercising a float-down provision. They sound similar but work very differently, and knowing the distinction keeps you from asking for the wrong one.
Re-locking: starting fresh
Re-locking means canceling your current rate lock entirely and issuing a new one at today's pricing. You start a new lock period—typically fifteen, thirty, forty-five, or sixty days—and the old lock disappears. Most lenders permit re-locks if you're still outside your closing window and nothing has been submitted to underwriting final approval. The catch: you're subject to current pricing, which includes the rate *and* the cost structure. If rates fell but lender fees or buydown costs shifted, your net improvement may be smaller than the raw rate drop suggests. Some lenders charge a re-lock fee, often a few hundred dollars; others allow one free re-lock per transaction. Re-locking resets your clock, so if your appraisal or title work was scheduled around the original lock expiration, you may need to coordinate extensions.
These figures are illustrative; rates and products are subject to change and this is not a commitment to lend.
Float-down: an in-lock adjustment
A float-down provision is a contractual feature baked into your original rate-lock agreement. It lets you adjust to a lower rate *within the same lock period* if rates improve by a defined threshold—commonly 0.25 or 0.50 percentage points. You keep your original lock expiration date and loan structure; only the rate (and corresponding costs) change. Float-downs typically come with strings: a one-time-use limit, a minimum rate improvement, an adjustment fee (often $250 to $500), and a narrow exercise window (frequently seven to ten days before closing). Not every lock agreement includes a float-down; it's an optional rider, and some lenders charge upfront to add it. If your loan is FHA, VA, or another government program, the float-down must still comply with that program's pricing rules.
Which scenario fits which tool
Use re-locking when rates drop significantly early in your process and you have time to restart the lock calendar. If you locked sixty days out and rates fall 0.75 points three weeks later, re-locking captures the new baseline and may save more than a capped float-down would. Use a float-down when you're close to closing, rates dip modestly, and you already have the provision in your agreement. If you locked thirty days ago at 6.75 percent, your closing is in ten days, and rates touch 6.50 percent, the float-down keeps you on schedule without re-triggering underwriting timelines.
The Alliance take
Lock policies vary by lender, loan type, and market conditions; what one investor allows another may prohibit outright. Before you lock, ask whether re-locks are permitted, what they cost, and whether a float-down rider is available. If rates are volatile or your closing is far out, that conversation is worth having up front. When the market moves in your favor, you'll know exactly which lever to pull—and what it costs to pull it. Start an application to walk through current lock options with our team.