It is important to ask the lender how long they guarantee the quoted interest rate. Other lenders may only agree to set a rate when the loan is approved. On occasion, lenders will not set a rate for the loan until just before closing. A longer guarantee period allows you to protect the rate for a longer length of time, which could be beneficial to you in a volatile interest rate market. Also, be sure to inquire whether long guarantee periods are available and what additional costs may be involved.
Mortgage rates can change from day to day or even more often.
The benefit is the security of knowing the interest rate is locked if interest rates should increase. If you are locked in and rates decrease, you may not necessarily get the benefit of the decrease in interest rates. If you choose not to 'lock in' your interest rate during the processing of your loan, you may 'float', or hold off locking in until you are comfortable about the rate. The borrower takes the risk of interest rates increasing during the time from application to the time the rate is locked in. The downside is that the borrower is subject to the higher interest rates.