Your rate lock guarantees your interest rate for a specific number of days—typically 30, 45, or 60. If your closing date slips past that window, you have two choices: pay to extend the existing lock or re-lock at whatever the market rate is that day. Neither option is free, and both can catch borrowers off guard.
How extension fees are structured
Most lenders charge extension fees in basis points—hundredths of a percent of your loan amount. A common structure is 0.0625% (one-sixteenth of a point) per day, or roughly 0.125% per week. On a $400,000 loan, each week of extension costs around $500. These figures are illustrative; rates and products are subject to change and this is not a commitment to lend.
Some lenders offer the first seven or fifteen days at no cost if the delay is documented and beyond your control—an appraisal backlog or title cure, for example. After that grace period, per-day or per-week fees apply. Extension terms vary by lender, loan program, and whether the delay is buyer-side or seller-side, so confirm the policy with your loan officer before your lock expires.
Re-lock versus extension
If rates have dropped since your original lock, you might assume a re-lock is the better play. Sometimes it is—but re-locks usually carry their own fee, often 0.25% to 0.50% of the loan amount, and you lose any favorable pricing adjustments tied to your original lock date. If rates have risen, the lender will gladly let you re-lock at the higher rate and pocket the spread.
In a rising-rate environment, extending the existing lock—even with fees—is almost always cheaper than re-locking. Your loan officer can model both scenarios once you know the new closing timeline.
Who pays the extension fee
By default, the borrower pays. In purchase transactions, buyers sometimes negotiate with the seller to cover extension costs if the delay was caused by seller-side repairs, title issues, or missed deadlines. That negotiation happens outside the loan; the lender collects the fee from the borrower at closing either way.
Avoiding extensions in the first place
Choose your initial lock period realistically. If you're buying new construction or need a complex appraisal, a 30-day lock is aspirational. Pay the modest upfront cost for a 45- or 60-day lock instead—it's cheaper than extending later. Work with your loan officer and real estate agent to set a closing date with buffer, and stay on top of conditions: upload documents the day they're requested, schedule the appraisal immediately, and respond to underwriting within hours, not days.
The Alliance take
Extensions are expensive insurance for a missed deadline. We help clients pick the right lock period at application and track milestones to keep closings on schedule. If an extension becomes necessary, we'll walk through the math so you understand exactly what you're paying and why. Questions about your lock timeline? Reach out before the clock runs out.