Rate Lock Extension Calculator
Estimate the cost of extending your mortgage interest rate lock.
Estimated Extension Fee
$0.00
What is a Rate Lock Extension?
A mortgage rate lock guarantees a specific interest rate for a set period, usually 30, 45, or 60 days. If your loan process is delayed due to appraisal issues, inspections, or underwriting backlog and the lock expires before closing, you may need a rate lock extension.
How Extension Fees are Calculated
Lenders typically charge extension fees in Basis Points (bps). One basis point is equal to 0.01% of the total loan amount. Fees are often structured in two ways:
- Daily Rate: A small fraction of a basis point per day (e.g., 0.02 bps per day).
- Flat Period Rate: A fixed cost for a block of time (e.g., 25 basis points for a 15-day extension).
Real-Life Calculation Example
Imagine you have a $400,000 loan and need a 10-day extension. The lender charges 0.025 basis points per day.
- Total Basis Points: 10 days × 0.025 bps = 0.25 bps
- Percentage: 0.25 bps / 100 = 0.0025%
- Total Cost: $400,000 × 0.000025 = $10.00 (Note: Lenders often have minimum flat fees or higher per-day rates like 2 bps, which would result in $800).
Common Reasons for Extensions
Delays can happen for many reasons. The most common include title search delays, missing documentation from the borrower, condo association approval lags, or unexpected repairs required by an appraiser. Understanding these costs helps you negotiate who pays—the buyer, the seller, or sometimes even the lender if the delay was internal.