Should you lock your rate or wait, hoping it drops? If you've had a home under contract for the past week and held off locking because you thought rates might come down, you probably got burned.

Here's what happened over the past few days: rates moved fast, and not in the direction people were hoping for.

Not locking your rate is gambling

Not locking your rate is gambling.

It's almost the equivalent of getting on Kalshi and betting on "will rates go down tomorrow?"

Just yesterday we saw a huge move in rates that cost a lot of money.

How rates actually move

Rates don't move day to day like you think. It's not like one day you can get a 6.75% and the next day that rate is gone.

It's the cost for the rate that changes.

Yesterday we saw an 80 basis point move. That means the cost for that rate increased by about 80 basis points, or 0.8 percent.

On a loan amount of say $400,000, that's $3,200.

Why this matters for your loan

Moves like that don't happen often. And I'm sure a lot of us wouldn't go on Kalshi and bet $3,200 that rates will improve.

But by not locking in your rate, you're in a way doing exactly that.

If you want to see how a rate change like this actually plays out in your monthly payment and closing costs, run your numbers through the payment and closing cost calculator. It'll show you real numbers instead of guesswork.

What to do instead

Lock in your rate.

If rates get a lot better after you lock, ask about float downs, or rate renegotiations, or move lenders if needed and if you have the time with deadlines.

That's the smarter play. You protect yourself from a bad surprise, and you still leave the door open if things improve.

If you want help thinking through your specific situation before you lock, you can grab a free planning session with me. Happy to walk through it with you.

Hope it helps.

Sam

Originally shared by u/SamTMortgageBroker in r/NewbHomebuyer — view the original thread.