Mortgage Rate Lock Float Down

See: Mortgage. See: Mortgage Rate Lock.

Locking in a low interest rate on a mortgage is awesome, no doubt about it. But what happens if interest rates fall even further during our lock period?

Well, if we’ve got a “mortgage rate lock float down” going on, our interest rate can be adjusted downward to match the current going rate. The best part about this option is that it only works in one direction. If rates go up, for example, we’re still locked in with our nice low rate. The not-as-great part is that we usually have to pay a fee to initiate the downward float, and sometimes those fees can be steep. But if the interest rate drop is substantial enough, we’ll more than likely make up the cost of the fee with our reduced mortgage payments.