Irish Calculators
Loans & mortgages

Blended Interest Rate Calculator for Loan Balances

Combine current loan balances and comparable annual rates to calculate a weighted average rate. It does not account for different payment dates, fees or terms as a refinancing comparison would.

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Your numbers

Each line: principal balance, annual nominal rate in percent. Use one currency and the same rate convention.
Your figures stay on this device.

How the calculation works

A blended interest rate weights each loan’s stated annual rate by its current principal balance. It answers which single rate describes the current mixture of balances, without pretending that loans with different terms form one repayment schedule.

Blended rate = sum(principal × rate) / sum(principal).

  1. Weight each rate by its balance

    Multiply each current principal balance by its annual percentage. A larger loan therefore contributes more strongly to the combined rate than a smaller loan.

  2. Total the balances and weights

    Add all principals and all balance-times-rate products. Zero-balance rows contribute nothing, and at least one balance must be positive.

  3. Calculate the weighted percentage

    Divide the weighted sum by total principal. The table preserves each entered balance and rate so you can check which borrowing drives the result.

Worked example: Unequal balances

Sample inputs demonstrate the method. They are not a forecast or product offer.

The example has €100,000 at 4% and €50,000 at 10%. Their annual rate-weighted amounts are €4,000 and €5,000. Dividing €9,000 by €150,000 gives 6%; the simple average of 7% would incorrectly treat the balances as equal.

Loan balances and annual rates
100000,4 50000,10

Expected result

Principal-weighted annual rate
6%
Combined principal
€150,000.00
Worked example: Zero balance has no influence

Sample inputs demonstrate the method. They are not a forecast or product offer.

Loan balances and annual rates
0,90 1000,3

Expected result

Principal-weighted annual rate
3%
Combined principal
€1,000.00

Understanding your result

The weighted rate lies between the lowest and highest rates on loans with positive balances. If every loan has the same rate, the combined result must equal it regardless of the balance sizes.

This is a snapshot. As loans amortize at different speeds, their weights and the blended rate change. It is not the APR, payment or total cost of a proposed consolidation loan.

Questions you might have

Can I average the rates without balances?

Only if all balances are equal. Otherwise a small high-rate loan would receive too much weight.

Choosing the right inputs

Loan balances and annual rates
Enter one balance and nominal annual percentage per line, separated by a comma, with no heading or thousands separators. Use the same currency and rate convention throughout, and list each loan only once.

Common mistakes to avoid

  • Taking an ordinary average of rates overweights small balances unless all principals are equal.
  • Do not mix nominal rates with fee-inclusive APRs or calculate across currencies without converting balances first.

Assumptions to check

  • Use current balances, matching currencies and matching annual-rate conventions.

Sources and method

Read our calculation and testing approach.