Savvy Homebuyers Master Mortgage Rate Lock vs Float

Advantages and Risks of Floating

Choosing to float your rate means you are opting out of locking in a rate immediately, hoping that rates will decrease before your loan closes. This can be a risky strategy, as mortgage rates can be volatile and are influenced by numerous factors, including economic indicators and Federal Reserve decisions. However, if rates drop, you could secure a lower rate, reducing your monthly payments and total interest paid over the loan's term². The key is to stay informed about market trends and consult with your lender to gauge the potential for rate changes.