Blended rate

Blended rate

A blended rate is the weighted average interest rate of a loan that charges one rate for part of the debt, and another rate for another part of the debt. In the case of a cash-out mortgage refinancing, some lenders might offer to extend one rate on the portion of the debt that's already outstanding, and a separate rate on the cash-out part of the loan. The weighted average of the two rates would be the loan's blended rate. Blended rate can also refer to the weighted average rate of a homeowner's first and second mortgages.