What to do when rates change while house hunting
Mortgage rates can move up or down between the time you start looking and the day you make an offer. Even small changes can shift your payment or price range. Here’s how to stay ready and protect your budget.
Why rates change
Rates react to economic news, inflation, and investor demand for mortgage-backed securities. They can move daily or even within the same week you’re touring homes. Most buyers are preapproved at a rate that’s current for that day.
How a rate change affects your price range
A 1% rate increase can raise your monthly payment by hundreds of dollars. That might reduce the total loan you qualify for. A rate drop can increase your buying power slightly, but you should still focus on comfort — not the max approval number.
Smart moves when rates move
- Recheck your preapproval. Ask your lender for an updated quote if more than a few weeks have passed.
- Adjust your search filter. If rates rise, lower your max price a bit to keep payments steady.
- Lock when ready. Once you find a home and go under contract, a rate lock freezes the rate for your loan term (often 30–60 days).
- Compare lenders. A small rate or fee difference can save thousands over time.
Ask your lender about these options
- Rate lock with float down: Lets you lock in but still drop if rates fall before closing.
- Buy-down points: Pay upfront to lower your rate, sometimes paid by the seller as an incentive.
- Shorter term loans: 15-year loans often carry lower rates if your budget allows.