What a blended rate is — and why yours might surprise you
If you carry two or three loans — a first mortgage, a HELOC, maybe a solar loan or a car note — you don't really have three rates. You have one blended rate: the balance-weighted average of everything you owe. A $300,000 first at 4% plus a $100,000 second at 9% isn't "a 4% mortgage with a small extra" — it's $400,000 of debt at 5.25%. Seeing that single number changes decisions: consolidating into a new loan at 6% would raise that borrower's cost, while a borrower blended at 7.5% might save hundreds a month.
The consolidation test, in one number
Enter each loan's balance and rate above and the calculator gives you the blend instantly, plus what each loan costs you in monthly interest. Then enter the consolidation rate you're being quoted. If the new rate beats your blend, consolidating wins on rate — before closing costs and term changes, which is exactly the conversation to have with a licensed professional. If the new rate loses to your blend, keep the structure and attack the expensive loan first: every extra dollar goes to the highest-rate balance.
Where blended rates decide real choices
This math settles some of the most common questions in home finance: Should I do a cash-out refinance of my low-rate first, or add a second mortgage and leave it untouched? Is rolling my 9% HELOC into a new 6.5% first a win or a loss? Should the car loan ride along in a consolidation? The answer is rarely obvious from the payments — it falls straight out of the blend.
Should I include my car loan or credit cards?
Include any debt you'd actually roll into the consolidation. But remember: moving short-term debt onto a 30-year schedule can cost more in total interest even at a lower rate — check the amortization tab for the long-schedule effect.