Blended Mortgage Rate calculator also known as Weighted Average Interest Rate Calculator or Mortgage Averaging calculator is a tool designed to allow you to determine the combined average interest rate by taking into account the size of each loan (weighted average). Knowing this information can be essential in various financing situations when homeowners are dealing with multiple mortgages with different rates and amounts and need to know which option to choose. Mortgages must have same Interest types, terms & compounding intervals for the calculator to return accurate information. For example, interest only mortgages should not be combined with mortgages that have interest & principal

When to use Blended Mortgage Rate Calculator?

Blended rate calculator can assist homeowner in the following situations:

When consolidating multiple mortgages into a single mortgage – Some homeowners have a 2nd or 3rd mortgage and are looking to consolidate all their mortgages into a single mortgage. In order for the homeowner to know what loan rate will be beneficial he needs to know what the current weighted average interest rate is. If by using this calculator the homeowner determines that his current blend rate is 5%, he knows that consolidation makes sense if the new loan has an interest rate that is less than 5%.

Deciding between getting refinance or second/third mortgage – Many times homeowner are afraid of getting a home equity loan (also referred to as second mortgage) as it has a higher interest rate than the first mortgage. Thus the homeowner need to know when getting a second mortgage/ third mortgage is beneficial and when refinancing make sense. The right decision can only be made by knowing the weighted rate so that it can be compared to the refinance rate

Blend and increase mortgage amount offered by some lenders – When purchasing a home, some financial institutions such Home Trust will provide the borrower with the option of 80% first mortgage and ask the client to get a secondary financing on their own or Home Trust can offer a single loan to 90% but increase the rate on the total loan. In these situations, a savvy homeowner or a mortgage broker needs to determine if it is best to increase the rate on the total amount or get secondary financing elsewhere.

How to use the Weighted Mortgage Average Rate Calculator

To calculate the combined average rate for your multiple mortgages start by entering the first mortgage loan amount and the associated interest rate followed by the second mortgage amount and its interest rate. If you also have a third mortgage or are thinking about getting a third mortgage, then enter the third mortgage amount and rate otherwise leave the space blank. Then press calculate rate to see the weighted average rate for the combined mortgages.