About

Combining multiple debts at different interest rates creates a hidden cost problem. The blended rate (weighted average interest rate) reveals your true borrowing cost across all obligations. This matters for refinancing decisions: if a consolidation loan offers 6.5% but your current blended rate is 5.8%, refinancing destroys value. The calculation weights each rate by principal - a $200,000 mortgage at 4% dominates a $15,000 car loan at 8%.

Lenders quote nominal rates that obscure portfolio-level exposure. This calculator applies the standard weighted mean used by underwriters and financial advisors to compute r_blend. Input each debt's outstanding balance and APR. The tool handles any mix: mortgages, HELOCs, auto loans, credit lines, student debt. Note: this computes rate blending only - it does not factor in fees, compounding frequency differences, or remaining term disparities that affect total interest paid.

Formulas

The blended interest rate is a weighted arithmetic mean. Each loan's contribution to the overall rate is proportional to its principal balance relative to total debt.

r_blend = n∑i=1 P_i × r_in∑i=1 P_i

Where P_i = principal balance of loan i, r_i = annual interest rate of loan i (as decimal or percentage), and n = total number of loans. The numerator sums the weighted contributions; the denominator normalizes by total principal.

Example: Two loans - $100,000 at 5% and $50,000 at 8%. Blended rate = (100000 × 5) + (50000 × 8)100000 + 50000 = 900000150000 = 6.0%.

Reference Data

Debt Type	Typical Rate Range	Common Terms	Secured
30-Year Fixed Mortgage	6.0% - 7.5%	360 months	Yes
15-Year Fixed Mortgage	5.5% - 6.8%	180 months	Yes
HELOC (Variable)	7.5% - 10.0%	10-year draw	Yes
Home Equity Loan	7.0% - 9.0%	60-180 months	Yes
Auto Loan (New)	5.0% - 8.5%	36-72 months	Yes
Auto Loan (Used)	6.5% - 11.0%	36-60 months	Yes
Federal Student Loan	5.5% - 8.0%	120-300 months	No
Private Student Loan	4.0% - 14.0%	60-180 months	No
Personal Loan (Bank)	8.0% - 15.0%	24-84 months	No
Personal Loan (Online)	10.0% - 25.0%	24-60 months	No
Credit Card (Standard)	18.0% - 26.0%	Revolving	No
Credit Card (Premium)	15.0% - 22.0%	Revolving	No
Business Line of Credit	7.0% - 18.0%	Revolving	Varies
SBA 7(a) Loan	10.0% - 13.0%	60-300 months	Yes
Equipment Financing	6.0% - 16.0%	24-72 months	Yes
401(k) Loan	5.0% - 6.0%	12-60 months	N/A
Margin Loan (Brokerage)	8.0% - 13.0%	On demand	Yes
Payday Loan (APR equiv.)	300% - 500%	14-30 days	No
Construction Loan	7.5% - 10.0%	12-18 months	Yes
Bridge Loan	8.5% - 12.0%	6-12 months	Yes

Frequently Asked Questions

A simple average treats all loans equally regardless of size. With debts of $200,000 at 4% and $10,000 at 20%, the simple average is 12%. The weighted blended rate is 4.76% - the large mortgage dominates. Simple averages mislead when balances differ significantly.

Use current outstanding balance. Blended rate reflects your present exposure. A mortgage originated at $300,000 with $180,000 remaining should use $180,000. This accurately weights your active debt structure.

With caution. Blended rate is a pure interest comparison. Refinancing involves closing costs (typically 2-5% of loan value), term changes affecting total interest, and potential loss of benefits (federal student loan protections, for example). Calculate breakeven period before deciding.

Variable rates (HELOCs, ARMs) introduce uncertainty. Use current rate for present-day snapshot. For planning, model scenarios: recalculate with rate caps or expected adjustments. Your blended rate will shift as variable components change.

No. This calculator assumes rates are stated consistently (typically APR). A credit card compounding daily at 20% APR has higher effective cost than a mortgage at 20% APR compounding monthly. For precise comparison, convert all to APY (Annual Percentage Yield) first.

Include it. A $15,000 promotional 0% APR balance reduces your blended rate by contributing principal without interest weight. This correctly reflects that portion of debt costing nothing during the promotional period.