Let's say that the current 30-year mortgage rate is 6.0% but I'm not sure that I'll be able to close within the next month. So I lock-in the rate for 60 days. Is anyone familiar enough with the lending institutions to tell me how they hedge against an increase in long term rates during the next 60 days? Even more so, how would they hedge a 120-day locked rate? Rates could go up a whole 1% during the next few months. In those cases, do the banks just eat the loss and give me the lower rate, or do they hedge using the bond index, or something else?