Use this blended rate calculator, blended interest rate, composite rate calculator, weighted average rate, combined rate calculator for quick, clear estimates. Try a tiny example to see the impact of each input.
Q: What is a blended interest rate?
A blended interest rate is a single interest rate calculated by combining two or more existing interest rates from different loans or portions of a loan, often used when refinancing or renewing a mortgage. It represents a weighted average of the original rates.
How is a blended interest rate calculated?
A blended interest rate is calculated by taking the weighted average of the different interest rates involved. For instance, in a blended mortgage, it considers the remaining balance and interest rate of your existing mortgage and the new amount being borrowed at a new rate, then calculates an average based on the proportion of each.
When might you use a blended rate calculator?
You might use a blended rate calculator when considering a mortgage refinance or renewal that involves combining an existing mortgage with a new one, or when consolidating multiple debts with different interest rates. It helps determine the effective overall interest rate you would pay.
What are the benefits of a blended mortgage rate?
The benefits of a blended mortgage rate can include avoiding prepayment penalties on your existing mortgage, securing a new rate without fully breaking your current mortgage contract, and potentially simplifying your loan structure into a single payment. It can offer flexibility when interest rates have changed since your initial mortgage.