Weighted Interest Calculator
The most powerful free weighted interest calculator. Compute the true blended interest rate across multiple loans, savings accounts, or credit lines by weighting each rate by its principal balance. See live interactive charts and step-by-step breakdowns.
Data Entry
Quick Presets
Computation Flow
LiveBalance Distribution
LiveRate Comparison
LiveResult Gauge
LiveBlended Interest Rate Calculator
Enter interest rates and balances to compute your true weighted blended rate across all accounts.
What Is a Weighted Interest Rate ?
Understanding Weighted Interest Rates
A weighted interest rate (also called a blended rate) is the average of multiple interest rates, where each rate is weighted by the outstanding balance or principal amount it applies to. Unlike a simple average, it reflects the true cost of borrowing or return on savings across all your accounts.
Blended Rate vs. Simple Average Rate
A simple average adds all rates and divides by count. A weighted average multiplies each rate by its balance, sums those products, then divides by the total balance. When loan amounts differ significantly, the blended rate gives a far more accurate picture of your true interest cost.
Interactive Balance Beam
Drag SlidersHow to Use the Weighted Interest Calculator
Enter Your Interest Rates
Type each account's annual interest rate (APR) into the 'Rate' column. These are the rates on your loans, mortgages, savings accounts, or credit lines.
Enter the Balances
Enter the outstanding balance or principal amount for each account. Larger balances have more influence on the blended rate.
View Your Blended Rate
The calculator computes your true weighted interest rate instantly. See the blended rate, total interest cost, and interactive breakdown charts update in real time.
Weighted Interest Formula
The Blended Interest Rate Formula
The weighted interest formula: multiply each rate by its balance, sum those products, then divide by the total of all balances. Mathematically: r̄ = Σ(rᵢ × bᵢ) / Σ(bᵢ).
Try the Formula Live
Live Formula — Edit Values
InteractiveHow the Calculator Computes Blended Interest Step by Step
Inside the Weighted Interest Calculator
Rates
Balances
Step 1: List rates and balances
Enter each account with its interest rate and balance. For example: Mortgage 4.5% ($250,000), Car Loan 6.9% ($25,000), Student Loan 5.2% ($45,000).
Step 2: Multiply each rate by its balance
4.5% × $250,000 = $11,250 · 6.9% × $25,000 = $1,725 · 5.2% × $45,000 = $2,340.
Step 3: Sum all the products
$11,250 + $1,725 + $2,340 = $15,315.
Step 4: Sum all the balances
$250,000 + $25,000 + $45,000 = $320,000.
Step 5: Divide to get the blended rate
$15,315 ÷ $320,000 = 4.79%. Your true blended interest rate is 4.79%.
Common Interest Rate Mistakes
Averaging rates without considering balances
A 3% rate on $200K and an 18% rate on $5K have a simple average of 10.5%, but the weighted rate is only 3.37%. Ignoring balances dramatically overstates your cost.
Confusing APR and APY
APR is the annual rate without compounding. APY includes compounding effects. Make sure you use the same type of rate for all accounts when computing the blended rate.
Forgetting variable-rate accounts
If some accounts have variable rates, recalculate your blended rate periodically as rates change. A fixed-rate snapshot may become outdated.
Correct approach
Multiply each rate by its balance. Sum all products. Sum all balances. Divide. This calculator automates the entire process for accurate blended rates.
Weighted Interest Examples
Loan Portfolio Blended Rate
A borrower has a mortgage, car loan, and student loan at different rates. Compute the true blended interest cost.
The blended rate reflects the true cost of all debt. The mortgage dominates because it carries the largest balance.
Savings Account Blended Yield
An investor has funds across three savings accounts with different APYs. Find the overall weighted yield.
The high-yield savings account has the most influence because it holds the largest balance.
Where Weighted Interest Is Used
Debt Consolidation
Determine your blended interest rate across all debts to evaluate whether a consolidation loan at a given rate would save money.
Mortgage Refinancing
Compare your current weighted rate across multiple mortgages against a refinancing offer to make informed decisions.
Savings Optimization
Calculate your blended savings yield across accounts to identify if reallocating funds to higher-rate accounts is worthwhile.
Business Lending
Banks compute weighted average cost of funds across deposits to set competitive loan rates and maintain margins.
Important Interest Rate Notes
All balances must be positive. The calculator requires positive balances. A balance of zero means that account has no influence on the blended rate.
Equal balances = simple average rate. When every account has the same balance, the weighted interest rate equals the simple average of all rates.
Blended rate falls between lowest and highest rates. No matter the balance distribution, the blended rate will always fall between the lowest and highest individual rates.
Larger balances pull the blended rate toward that rate. The larger a balance relative to the total, the more the blended rate is pulled toward that account's rate. A $250K mortgage at 4% dominates over a $5K credit card at 18%.
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