The Englishman entered day three in a share of the lead but took total control as he cruised to the turn in 31 with a six shot advantage.
A three putt bogey on the tenth came completely out of the blue and Horsfield came home in 40 to get to 14 under and leave the second event of the UK Swing wide open heading into the final 18 holes.
After carding a 59 playing with friends in Orlando during the coronavirus hiatus, Horsfield signed for a 61 last week at Close House to show he still had the appetite to go low.
A 63 on Friday continued that trend and the 23-year-old moved to 18 under after nine holes on Moving Day and appeared to be comfortably en route to a first European Tour victory.
But two three putts, a lost ball off the tee at the 12th and a shot in the water at the penultimate hole blew things wide open in the Midlands.
"My caddie just said to me coming off the 18th green, 'if someone would have said to you on Thursday you can have a one shot lead going into Sunday, you would take it'," said a philosophical Horsfield.
"I've made it a little bit harder for myself from the position I was in but I'm still looking forward to tomorrow, it'll be a lot of fun."
Højgaard already has a European Tour victory to his name at just 19 years of age after his triumph earlier this season at the AfrAsia Bank Mauritius Open, and the four month break has not affected his form with a second placed finish last week.
I've made it a little bit harder for myself from the position I was in but I'm still looking forward to tomorrow, it'll be a lot of fun
Korhonen is looking for European Tour win number three, while Farr is a three time victor on the European Challenge Tour.
Starting the day six shots off the lead, Højgaard made a birdie-birdie start and added gains at the fifth and seventh to move up the leaderboard but he could not keep pace with Horsfield.
After holing from 12 feet on the first and putting his approach to tap-in range at the second, the leader sandwiched a 15 footer on the sixth with two putt birdies on the par five third and seventh to show the field a clean pair of heels.
Korhonen was his nearest challenger as he holed a long putt on the eighth to complete a hat-trick of gains after a birdie on the fourth, while Højgaard joined him with a two putt birdie at the par five 12th.
Farr, meanwhile, had been quietly going about his business, making gains on the fourth, seventh, 11th and 13th.
A three putt on the tenth was Horsfield's first stumble of the day but he bounced back with a birdie on the next before losing his ball off the 12th tee to surrender a double.
Højgaard and Farr both took advantage of the par five 17th to get to 13 under, as did Korhonen, who had birdied the 12th and bogeyed the 13th.
Another three putt from seemingly out of nowhere on the 16th cut Horsfield's lead to two and when he found the water with his second on the 17th, he was just one ahead.
Co-overnight leader Garcia Rodriguez carded a 73 and Paisley signed for a 66 to sit a shot ahead of French trio Benjamin Hebert, Matthieu Pavon and Antoine Rozner, Swede Alexander Björk, England's Richard Bland, Belgian Thomas Detry and Dane Joachim B. Hansen.