Blended Rate Calculator
Work out the single blended interest rate across two loans or balances. Enter each balance and its rate, and this calculator returns the weighted-average (blended) rate plus the combined balance and total annual interest.
Formula
Blended Rate = (Balance₁ × Rate₁ + Balance₂ × Rate₂) ÷ (Balance₁ + Balance₂)
- The blended rate is a weighted average: each rate is weighted by its share of the total balance.
- A larger balance pulls the blended rate closer to its own rate, so the bigger loan dominates.
- It always lands between the two individual rates, never above the higher or below the lower one.
- Total annual interest is the sum of each balance times its rate, which is what the blended rate reproduces on the combined balance.
- This assumes simple annual interest; compounding or differing terms can make the true effective rate differ slightly.
$200k at 4% + $50k at 7%
Inputs
- Balance 1: 200000 $
- Rate 1 (%): 4 %
- Balance 2: 50000 $
- Rate 2 (%): 7 %
(200,000 × 4 + 50,000 × 7) ÷ 250,000 = 4.6%. The blended rate sits near 4% because the larger balance carries that rate.
Frequently asked questions
What is a blended interest rate?
It is the single weighted-average rate that, applied to your combined balance, produces the same total interest as the separate loans at their own rates.
How is it calculated?
Multiply each balance by its rate, add those together, then divide by the total of both balances.
Why isn't it just the average of the two rates?
Because the balances usually differ. The rate on the larger balance counts more, so the blended rate is weighted toward it rather than a simple midpoint.
Where is a blended rate useful?
It is handy for comparing consolidation offers, understanding the overall cost of multiple debts, or blending a first and second mortgage into one figure.
Does it account for different loan terms?
No. This is a straightforward weighted average of stated rates. Loans with different terms or compounding can have a slightly different true effective cost.