Blended rate calculator
When you add new money to an existing mortgage (portability, top-up, refinance with port), the lender blends old balance + new advance at a weighted-average rate. Compute it here.
Your scenario
Result
What blending and extending means
When you need new mortgage money mid-term — for a renovation, top-up, or to cover the gap in a portability move — you typically have two choices: break the mortgage (pay a penalty + take the new rate on the whole balance) or blend (keep your old rate on the existing balance + add new money at today's rate, weighted-averaged into a single rate).
Blending is structured by the lender and locked in. The math: blended rate = (old balance × old rate + new advance × new rate) ÷ total balance.
Two flavours of blend
- Blend and extend: blend the rates AND reset the term back to (e.g.) a new 5-year. Most common option offered by major banks.
- Blend to term: blend the rates but keep the remaining term unchanged. Less commonly offered — banks prefer to lock you in for another full term.
When blending is the right move
- You need an additional advance (e.g., refinance + renovation, port + top-up)
- Your old contract rate is well below current rates AND your IRD penalty for breaking would be significant — blending preserves the cheap part
- You're moving (porting) to a new home with a larger mortgage
- You want to lock in a longer rate horizon (blend and extend offers this benefit)
When blending is NOT the right move
- Your old rate is HIGHER than current rates — break the mortgage, take the new lower rate on the whole balance, eat the (probably small) 3-month-interest penalty
- You're close to renewal (within 6 months) — wait for the renewal date and start fresh
- The new lender is offering meaningfully better pricing or product features that justify breaking
- You don't actually need new money — there's nothing to blend with
Worked example
$420,000 existing mortgage at 3.49% (signed in 2021), need $180,000 of new money for a renovation. Today's rate: 5.04%.
- Blended rate: ($420k × 3.49% + $180k × 5.04%) ÷ $600k = 3.95%
- Vs breaking and rewriting at 5.04% on full $600k: 1.09 percentage points higher cost across the entire balance
- Difference per year: $600k × 1.09% = ~$6,500/year of savings from blending
- Plus you avoid the IRD penalty (likely $20-40k on a 2021 fixed mortgage)
Watch for these gotchas
- Some lenders only blend at the posted rate for the new portion, not the discounted rate they advertise to new applicants. Read the fine print.
- Blend and extend resets the term — you commit to a new full 5-year (or other) term, so you can't take advantage of falling rates as easily
- Switch lenders to blend isn't typical — blending is almost always with your existing lender
- Compare to alternative: a HELOC + keeping the existing first mortgage intact sometimes beats blending
Related
Mortgage agent or broker? Calculators like this one embed on the website you already have, and Mortgage360 campaign landing pages capture the enquiries they start straight into your CRM.