Blended Rate Mortgage Calculator
Weighted-average rate across multiple loans.
Calculate the blended (weighted-average) interest rate across two mortgage loans of different balances and rates. Free and educational.
What this tool does
This calculator computes the blended interest rate across two separate loans by weighting each loan's rate according to its balance relative to total debt. Enter both loan balances and their corresponding interest rates to see the effective rate you're paying in aggregate. The result represents a single average rate that describes your combined borrowing cost across both loans. The blended rate is driven primarily by whichever loan carries the larger balance—a bigger loan at a higher rate will pull the average upward more significantly than a smaller loan. This calculation is useful when consolidating debt or comparing the true cost of holding multiple loans simultaneously. The calculator assumes both loans have equal remaining terms; if repayment periods differ materially, the blended rate serves as an educational illustration rather than a precise reflection of total interest paid over time. The tool does not account for fees, variable rates, or changes in balance over time.
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Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Blended rate is what you are effectively paying when you hold two loans. 200,000 at 3% plus 50,000 at 7% is not 5% — the larger low-rate loan dominates. Actual blended rate is 3.80%. This is the figure often used when comparing against a single refinance offer.
A worked example
With the defaults: loan 1 balance of 200,000, loan 1 rate of 3%, loan 2 balance of 50,000, loan 2 rate of 7%. The tool returns 3.80%. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.
What moves the number most
The result responds to Loan 1 Balance, Loan 1 Rate, Loan 2 Balance, and Loan 2 Rate. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.
The formula behind this
Weighted average of the two rates by balance. The simple version ignores differing remaining terms; the comparison is cleanest when both loans have similar terms. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.
Why this matters
A mortgage is usually the biggest single financial commitment a person makes. Over the full term, the gap between different rates and structures can add up across total interest paid. Modelling the numbers ahead of a decision shows how sensitive the outcome is to the rate and structure chosen.
What this doesn't capture
The figure shown reflects the core calculation; additional costs such as arrangement fees, valuation, legal fees, insurance, and any early-repayment charges (where applicable) sit on top and can add materially to the total cost of borrowing. Rates and product terms can also change over the life of the loan, which can shift the picture relative to this fixed-snapshot estimate.
Blending your loans at 3% and 7% produces a weighted-average rate of 3.80%.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
This calculator computes a weighted-average interest rate across two loans. It multiplies each loan's balance by its interest rate, sums those products, then divides by the total balance. The result represents the single blended rate that would produce equivalent total interest charges if applied uniformly across the combined loan amount. The model assumes both loans have equal remaining terms and that interest accrues at a constant rate with no fees, prepayment penalties, or adjustments. It does not account for differing loan durations, varying payment schedules, compounding frequency differences, or the actual sequence of payments over time. The blended rate serves as a simplified comparison tool rather than a precise prediction of future payments.
References
Frequently Asked Questions
When is this useful?
Does term length matter?
Is blended rate the same as APR?
Can I use this for more than 2 loans?
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