 The total rate paid by the customer varies, or "floats", in relation to some base rate, to which a spread or margin is added (or more rarely, subtracted).The term of the loan may be substantially longer than the basis from which the floating rate loan is priced; for example, a 25-year mortgage may be priced off the 6-month prime lending rate.Floating rate loans are common in the banking industry and for large corporate customers.