Blended Rate Mortgage Calculator

Blended Rate Formula:

\[ \text{Effective Rate} = \frac{\sum (\text{Mortgage Amount}_i \times \text{Rate}_i)}{\text{Total Mortgage}} \]

Blended Interest Rate:

Total Mortgage Amount:

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1. What is Blended Mortgage Rate?

The blended mortgage rate is the weighted average interest rate across multiple mortgages. It represents the effective interest rate you're paying when combining loans with different rates and amounts.

2. How Does the Calculator Work?

The calculator uses the blended rate formula:

\[ \text{Effective Rate} = \frac{\sum (\text{Mortgage Amount}_i \times \text{Rate}_i)}{\text{Total Mortgage}} \]

Where:

\( \text{Mortgage Amount}_i \) — Individual mortgage amount in USD
\( \text{Rate}_i \) — Interest rate for each mortgage (as decimal)
\( \text{Total Mortgage} \) — Sum of all mortgage amounts

Explanation: The equation calculates a weighted average where larger mortgages have proportionally greater impact on the final rate.

3. Importance of Blended Rate

Details: Knowing your blended rate helps when comparing refinancing options, evaluating the cost of multiple loans, or consolidating debts. It provides a single rate that represents your true borrowing cost.

4. Using the Calculator

Tips: Enter each mortgage amount in USD and its corresponding interest rate in percentage. Add as many mortgages as needed. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: When would I need to calculate a blended rate?
A: When you have multiple mortgages (like after a home purchase with bridge financing), when considering refinancing options, or when comparing loan scenarios.

Q2: Does the blended rate affect my monthly payment?
A: Not directly. Your actual payments remain unchanged, but the blended rate helps you understand your average borrowing cost.

Q3: Should I include HELOCs in this calculation?
A: Yes, any form of mortgage debt with an interest rate should be included for an accurate blended rate.

Q4: How does refinancing affect the blended rate?
A: Refinancing typically replaces multiple loans with one new loan, creating a new single rate that should be compared to your previous blended rate.

Q5: Can I use this for other types of loans?
A: Yes, this calculation works for any type of debt (student loans, car loans, etc.) where you want to find the average interest rate.