In mid-September, the Federal Reserve cut the benchmark rate by 0.5%. The news has sparked renewed interest in the homebuying market. However, some potential buyers may still be hesitant, waiting for rates to drop further to ensure they secure the lowest possible rate. If you’re feeling this uncertainty but are ready to buy, a rate float down might be the solution. In this article, we’ll explain what a rate float down is and how it could help you navigate an unpredictable market.
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How Does A Rate Float Down Work?
A rate float down is an option that allows borrowers to take advantage of a lower interest rate if rates decrease after they’ve locked in a rate but have not yet closed on the loan. This option gives buyers the flexibility to secure a better rate if the market shifts without having to start the loan process over again.
For example, you lock in at a certain rate on your mortgage, but a few weeks later, the rates drop by 0.5% before your closing date. You could potentially lower your locked-in rate by requesting a float down to the new, lower rate, saving you money over the life of the loan.
Some lenders may have guidelines when it comes to qualifying for a rate float down, including a minimum rate decrease of 0.25% or more. There may also be a fee associated, which can vary depending on the lender and the type of loan. Not all lenders offer the option of a rate float down, so be sure to talk with your Loan Officer to learn more about your specific situation.
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Benefits Of A Rate Float Down
Here are some of the potential benefits of a rate float down:
- Lower rate = lower payment: One of the most immediate benefits is that securing a lower interest rate reduces your monthly mortgage payment, making your home more affordable.
- Peace of mind: Locking in a rate can be nerve-wracking if you’re worried about missing out on lower rates. A rate float down provides the reassurance that you could still benefit from a rate drop even after you lock in.
- Long-term savings: Even a small reduction in your interest rate could save you a significant amount over the life of your loan.
- Ideal for new construction homes: If you’re purchasing a new construction home, you may be locked into your rate for a longer period than someone buying a resale home. A rate float down gives you flexibility to adjust your rate if the market changes.
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Still navigating today’s market? Check out our article on Understanding Seller Concessions and Incentives.
Is A Rate Float Down Right For You?
Lower payments, peace of mind, and added flexibility make a rate float down an attractive option in a fluctuating interest rate environment. When considering a rate float down, it’s important to understand the possible costs and terms associated with it. Don’t let the changing market hold you back. Reach out to your Mortgage Loan Originator to discuss your options for your circumstance. They will guide you through the details and help you make an informed decision.
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About Acrisure Mortgage
Acrisure Mortgage (formerly FBC Mortgage, LLC) is a Top 10 national mortgage lender headquartered in Orlando, Florida. Licensed in 49 states and supported by more than 19,000 dedicated professionals across Acrisure, we specialize in residential mortgage lending through both retail and wholesale/correspondent channels. Our comprehensive offerings include purchase, refinance, construction and renovation loans—tailored to meet the unique needs of homebuyers, homeowners and partners nationwide.
We are proud to serve as a trusted partner to many of the nation’s largest homebuilders and real estate professionals, with a strong foundation of loyal, satisfied clients. Recognized for our commitment to service, innovation and operational excellence, Acrisure Mortgage has received numerous national accolades, including Top 50 Mortgage Companies, Best in Loan Delivery and Best Place to Work honors.
As part of the Acrisure family, we are backed by a global fintech leader that shares our values of innovation, integrity and service. Together, this empowers us to expand our capabilities, leverage world-class technology and resources, and grow alongside the clients and communities we serve.
All information presented is for educational purposes only and not intended as financial advice. NMLS ID#152859 EHL ©2025.
FBC Mortgage is Now Acrisure Mortgage
FBC Mortgage officially rebranded as Acrisure Mortgage on July 1, 2025. This change reflects the company’s continued alignment with its parent company, Acrisure.
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