What is a float-down option on a mortgage, and is it worth paying for?

A float-down lets you lock a rate now but capture a lower one if market rates fall before closing, giving you protection in both directions. Lenders usually charge for this feature, either as an upfront fee or a slightly higher rate, and the rate must typically drop by a minimum threshold, often 0.25%, before you can exercise it. It can be worth it when rates are volatile or expected to fall and you are locking for a longer 45- to 60-day period. If rates are stable or already low, the extra cost rarely pays off. Read the exact terms, including how much of a drop triggers it and whether it applies only once, before agreeing to pay.