Enter loan amounts and rates to see blended rate…
Blended Rate Calculator. Combines up to 3 loans into a single weighted average interest rate. Real-time, visual, step-by-step. Perfect for mortgage refinancing or debt consolidation.
Managing multiple loans with different interest rates? A blended rate calculator helps you determine your true average interest rate across all debts—making refinancing decisions easier and more profitable.
A blended interest rate (also called a weighted average rate) combines multiple loan balances and their interest rates into one effective rate that reflects your total cost of borrowing.
Unlike a simple average, a blended rate accounts for how much you owe on each loan. Larger loans have more weight in the calculation, giving you an accurate picture of what you’re actually paying.
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Example:
Simple average: (4% + 6%) ÷ 2 = 5% ❌ Incorrect
Blended rate: Properly weighted = 5.33% ✓ Correct
The $100,000 loan at 6% has twice the impact, pulling your true average up to 5.33%. This difference can cost you thousands when making refinancing decisions.
Blended Rate = (Loan₁ × Rate₁ + Loan₂ × Rate₂ + ... + Loanₙ × Rateₙ) ÷ Total Loan AmountYour Current Loans:
| Loan | Amount | Interest Rate |
|---|---|---|
| Personal Loan | $60,000 | 4.0% |
| Credit Card | $40,000 | 6.0% |
Step 1: Multiply each loan amount by its interest rate
Step 2: Divide by total loan amount
Your blended interest rate is 4.8%—this is the minimum rate you need to beat when refinancing or consolidating.
Before consolidating multiple loans, calculate your current blended rate. If a lender offers 5.5% and your blended rate is 4.8%, you’ll actually pay more interest—even though it seems convenient.
Real scenario: A homeowner with a blended mortgage rate of 4.2% was offered a “simplified” refinance at 4.9%. By calculating first, they avoided paying an extra $3,500 per year in interest.
When comparing debt consolidation loans, your blended rate is your benchmark. Any consolidation offer must beat this rate to save you money.
Mortgage lenders use blended rates when you refinance part of your loan early or add a home equity line of credit (HELOC). Understanding your blended mortgage rate helps you negotiate better terms.
Companies with multiple credit lines, business loans, and financing at different rates need blended rate calculations to track overall borrowing costs and optimize their debt structure.
When you refinance your mortgage early or borrow additional funds against your home, lenders often offer a blended mortgage rate instead of creating separate loan products.
Common Mortgage Blending Scenarios:
Current Situation:
Blended Calculation:
Instead of managing two separate rates, you get one mortgage at approximately 4.1%—simplifying payments while potentially saving on fees.
Many borrowers manage student loans, car loans, and credit cards simultaneously. Here’s how to calculate your overall blended rate:
| Loan Type | Balance | Interest Rate |
|---|---|---|
| Student Loan | $20,000 | 5% |
| Auto Loan | $30,000 | 7% |
| Credit Card | $50,000 | 9% |
Calculation:
Notice how the $50,000 credit card at 9% significantly pulls up your overall rate. This insight helps prioritize which debt to pay down first for maximum interest savings.
✓ Before refinancing any loans—know your baseline before comparing offers
✓ When consolidating debt—ensure the new rate actually saves money
✓ During mortgage renewal—especially if you’re breaking your term early
✓ After paying down significant debt—your blended rate improves as you eliminate high-rate loans
✓ When adding new debt—see how it affects your overall borrowing cost
✓ Quarterly financial reviews—track your progress and adjust strategy
UK-specific applications:
FCA compliance note: UK lenders must clearly disclose blended rates when offering product transfers or early refinancing options.
US-specific applications:
FTC guidelines: Lenders must provide APR disclosures, but blended rate calculations help you see beyond promotional rates.
The same formula works for calculating weighted average returns across multiple investments:
Blended Return = (Investment₁ × Return₁ + Investment₂ × Return₂) ÷ Total InvestmentExample: