Mortgage HELOC Blended Rate Calculator

Blending first mortgage with HELOC second lien shows true cost of capital.

First mortgage balance

First rate %

HELOC balance

HELOC rate %

Blended rate %

0.056%

Total debt

$350,000

Total annual interest

$19,750

How the math works

Blended = (first × rate + second × rate) / total balance.

($300k × 5% + $50k × 9.5%) / $350k = ($15k + $4.75k) / $350k = 5.64% blended.

How to Use

Enter first mortgage balance.
Enter first rate %.
Enter heloc balance.
Enter heloc rate %.
Read blended rate %.

Frequently Asked Questions

When does blended rate matter?

Investors with multiple lien layers compare blended cost to single-loan refi alternative. Calculation: weight each lien by balance × rate / total. Variable-rate HELOC blended weight changes with Prime rate. Example: $300k 1st @ 5% + $50k HELOC @ 9% = blended 5.57%. Compared to single $350k cash-out at 6.5% = 6.5% blended. HELOC layer cheaper despite higher second-lien rate. Strategy: use HELOC as intermediate-term capital, term-fund with refi when rates favorable.

How does this debt analysis fit a workout strategy?

Workout, default, and recapitalization decisions depend on the gap between in-place debt and current asset value. Lenders evaluate cure cost, foreclosure timeline + cost, broker price opinion (BPO), and borrower equity. Borrowers evaluate equity in the property, refinance feasibility, and forbearance economics. This calculator provides one input to that multi-factor decision.

Discounted payoff (DPO) vs forbearance vs deed in lieu?

DPO: lender accepts less than full balance to avoid foreclosure cost, common with non-recourse and underwater assets. Forbearance: payment deferral 6–18 months, balance accrues, useful when value will recover. Deed in lieu: borrower transfers title to lender, faster than foreclosure but lender takes full risk. DPO often best when borrower has new capital + lender wants quick exit.

Special servicing dynamics?

CMBS loans transfer to special servicer at default or maturity default. Special servicer compensation aligns with workout, but timeline is 6–24 months and fees stack ($25–250k+ in costs). Whole-loan and balance-sheet lenders move faster but with less flexibility. Bridge and debt fund lenders most flexible. Time-to-resolution and total friction cost should be weighted in any borrower scenario.