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High-balance borrowers—those seeking mortgages that exceed conventional loan limits—face a unique challenge in today’s volatile interest rate environment: how to lock in a favorable rate while navigating an extended home search or uncertain closing timelines. Two popular strategies have emerged: Lock-&-Shop and Float-Down.
In this article, we break down how each strategy works, their pros and cons, and how high-balance borrowers can make the right move to protect their investment and peace of mind.
What Is a Rate Lock?
A rate lock is a lender’s guarantee that your mortgage interest rate will not change between the offer and closing date, provided you close within a specified time frame and there are no changes to your loan application.
Locking in a rate can protect borrowers from rising rates, but it’s important to understand the options available—especially for jumbo or high-balance loans where even a small rate change can significantly impact your monthly payment.
Lock-&-Shop Strategy
What It Is
The Lock-&-Shop strategy allows borrowers to lock in a mortgage rate before selecting a property. This is ideal for those in competitive housing markets or who need more time to find the right home.
Pros
- Rate security: Protects you from rate hikes while you shop.
- Time to search: Often includes a 60–90 day lock period, giving flexibility.
- Budget certainty: You know your rate early, which helps with home affordability planning.
Cons
- Upfront fees: Some lenders charge fees or require a rate lock deposit.
- Limited lock extension: May be costly to extend if you don’t find a property in time.
- Potentially higher rate: Lock-&-Shop rates can be slightly higher than standard rate locks.
Float-Down Option
What It Is
A Float-Down allows borrowers to lock in a rate, but take advantage of a lower rate if market rates drop before closing—typically one time, and under specific lender conditions.
Pros
- Downside protection: You benefit if rates fall during underwriting.
- Lock in peace of mind: You secure a cap on your rate.
- Attractive during rate volatility: Ideal when market trends are uncertain.
Cons
- Stricter conditions: May require documentation of rate movement and be limited to a narrow window before closing.
- Fees may apply: Not always free and often includes an adjustment to the base rate.
- Not guaranteed: If rates don’t drop, the feature may go unused.
Which Strategy Is Right for High-Balance Borrowers?
Choose Lock-&-Shop If:
- You need more time to find a property.
- You’re shopping in a tight inventory market.
- You want to secure budgeting certainty early in the process.
Choose Float-Down If:
- You’re confident you’ll close quickly.
- You expect rate drops and want to capitalize.
- You’re working with a flexible lender that offers favorable float-down terms.
Internal Links for Further Reading
- Learn more about Jumbo Loan Requirements and Limits
- Explore our Mortgage Rate Lock Guide
- Need help choosing? Check out our First-Time Buyer Strategy Guide
Frequently Asked Questions (FAQ)
Can I combine Lock-&-Shop and Float-Down?
Some lenders may offer a hybrid product that includes both features, but it’s rare and often comes at a premium.
How long can I lock my rate with Lock-&-Shop?
Typically 60–90 days, though some lenders offer 120-day locks with conditions.
Does the float-down automatically apply if rates fall?
Not always. Borrowers must request the float-down and meet the lender’s specific criteria, including timing and market movement thresholds.
Read Next
Get Expert Financing
- Matched with investor-friendly lenders
- Fast pre-approvals-no W2s required
- Financing options fro rentals, BRRRR, STRs
- Scale your portfolio with confidence
Our advice is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
