The Blended-Rate (Keep-Your-Rate) Calculator
This is the most valuable calculator on this site for anyone holding a low first-mortgage rate. It compares the blended cost of keeping your first mortgage and adding a small second loan against the cost of refinancing everything at today’s rate.
How the blend works
Your blended rate is the weighted average of your two balances. A large balance at a low rate plus a small balance at a higher rate still averages out low — because the higher rate only applies to the smaller slice.
| Debt | Balance | Rate |
|---|---|---|
| First mortgage (kept) | $300,000 | 3.5% |
| New second loan | $50,000 | 8.5% |
| Blended | $350,000 | ~4.21% |
Compare that 4.21% blended cost to refinancing the full $350,000 at, say, 6.75%, and the advantage of keeping your first mortgage is obvious. The calculator makes it undeniable.
The larger your existing balance and the lower its rate, the more a blended second-lien approach wins. Run your real numbers before any cash-out refinance — it may save you tens of thousands.