Float
Direct definition
Choosing not to lock your interest rate and letting it move with the market until a later decision.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
Floating exposes you to rate movement — up or down — and requires you to eventually lock before closing. Some lenders offer a float-down option after lock.
Why it matters
Floating can pay off in a falling market and hurt in a rising one; the choice depends on rate expectations and your closing timeline.
Where you may see it
- Rate lock agreement
- Loan Estimate
A real-world example
You float for two weeks after application; rates drop 0.125% and you lock at the better rate.
Educational and illustrative only
A common misunderstanding
Floating doesn't guarantee a better rate — it exposes you to market movement in either direction until you lock.
Ask Vabasso AI
This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026