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What is the difference between locking and floating an interest rate?

April 26, 2017floating Interest rate locking

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What is the difference between locking and floating an interest rate?

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Locking a rate means that you have agreed on an interest rate with your loan officer, at which time he/she will make a formal agreement with the broker or correspondent that your loan will be serviced by. Floating an interest rate is used when the market is volatile and your loan officer believes that the rates could improve. Basically, your loan will be registered in the system, but your rate has not been locked.