Updated November 6, 2026

What is a down-only mortgage?

Is there a mortgage whose rate goes down automatically? Yes: a down-only mortgage.

A down-only mortgage is a home loan whose interest rate can fall but never rise. After an initial fixed period, when market rates fall by a defined amount, the rate resets lower automatically, down to a floor. Marian Mortgage is a planned example of this kind of loan; it is pre-launch and not yet lending.

How it works

Starting rate. Set when the loan is made, and fixed for an initial period.
Automatic resets. After that, when market rates fall by a defined amount, the rate resets lower on its own. The borrower doesn’t have to watch rates; Marian handles the work. Any conditions on a reset, and whether a reset has any costs, are set in the loan terms and will be published at launch.
A floor. Resets stop at a minimum rate set in the loan terms.
Never up. If market rates rise, the rate stays where it is.
No new debt. A rate drop applies to the balance already owed. It never adds to what you owe or returns cash.

With Marian, rate drops happen automatically, and Marian does the work and the paperwork.

Why it matters

Lower market rates only reach a standard fixed-rate borrower who refinances, and many don’t. About 1 in 5 homeowners who would clearly have benefited from refinancing hadn’t done it, in a study of US mortgages outstanding in December 2010 (Keys, Pope and Pope, “Failure to Refinance,” Journal of Financial Economics, 2016). A down-only mortgage is built so rate drops reach the borrower automatically, whether or not they are watching rates.

What it costs

The right to a lower rate later is an option, and options aren’t free. In a down-only mortgage, its cost is built into the starting rate. That makes one number a useful way to judge any down-only loan: how much higher its starting rate is than a standard fixed-rate loan’s.

You can test that yourself. How Marian’s rate works explains the method, and the open-source proof-engine model lets anyone price down-only designs against a standard loan with their own inputs.

What’s the catch?

The feature is priced into the starting rate, so you start higher than a comparable standard fixed-rate loan, and the feature buys nothing if market rates never fall meaningfully during the loan.

Automatic. Rate drops happen automatically, and Marian does the work and the paperwork.
What it follows. A published market index, to be confirmed at launch with our lending partner.
Limits. A reset needs market rates to fall by a defined amount, and resets stop at a floor.
What a reset can’t do. A reset can’t take cash out, change the loan term or go below the floor.
Status. The index, the reset rules, the floor, starting rates and eligibility haven’t been published yet. Marian is pre-launch and not lending in any state.

Once the terms are published, compare Marian’s starting rate with a standard fixed-rate loan’s, using the open-source model.

Who it suits, and who it doesn’t

It tends to suit borrowers who expect to keep their mortgage for years, or who don’t want to monitor rates or manage refinancing.

It is not a fit for:

Anyone who needs a mortgage now; Marian is not available.
Borrowers who expect to sell or pay off the loan soon.
Borrowers who plan to take cash out or change the loan term; those require a refinance.
Borrowers focused mainly on the starting rate who are confident they will refinance at the right times themselves.
Borrowers whose goal is to capture very large rate declines; resets stop at the floor.
Borrowers who expect to get unusually good personal refinance offers compared with national averages.

Has this been tried before?

Versions of automatic rate reductions have existed, and they’ve mostly struggled with funding and investor appetite rather than demand. Two things are different now. AI assistants are starting to make refinancing easier and faster, which raises the cost of the refinance option built into every standard mortgage. And Marian is designed around funding the rate-drop feature from day one, rather than treating it as an add-on.

Is this a ratchet mortgage?

Yes, it’s the same idea. A ratchet mortgage is a loan whose rate can reset lower when market rates fall but never rises. Andrew Kalotay, who proposed the concept with Bert Ely, has described it as a “one-way ARM” (Kalotay, “The Case for the Ratchet Mortgage,” Mortgage Contract Design Conference, 2015). The CFPB’s 2022 request for information on mortgage refinances and forbearances describes the same kind of design: a mortgage whose rate automatically decreases with market rates but never increases, as distinct from a variation whose rate moves with the market but never rises above its original rate (CFPB, request for information on mortgage refinances and forbearances, Docket No. CFPB-2022-0059). With Marian, after an initial fixed period, when market rates fall by a defined amount, the rate resets lower automatically, down to a floor.

Is this the same as a self-refinancing mortgage?

No. A self-refinancing or automated-refinance service prepares a refinance for you to approve each time rates fall. With Marian, rate drops happen automatically, and Marian does the work and the paperwork.

What if I never get around to refinancing?

With Marian, rate drops happen automatically, and Marian does the work and the paperwork.

Where Marian is today

Marian is pre-launch. It isn’t a lender or mortgage broker, isn’t offering credit and isn’t lending in any state. At launch, Marian’s loans will be made by a licensed lending partner. Marian will not offer any loan until it, or its lending partner, is licensed to do so. The only thing to do today is join the waitlist.