Blended Rate
A blended rate combines two or more interest rates into a weighted average borrowing, lending, or refinancing rate.
Banking rate terms for fixed, floating, variable, blended, contract, and face interest-rate structures.
Fixed, floating, and variable rates are contract labels that describe whether an interest rate stays locked, changes by bank discretion, or moves with a reference rate.
Use this branch when a borrower, depositor, analyst, or banker needs to understand how a rate may behave after the initial quote.
| Term | What it clarifies |
|---|---|
| Fixed Interest Rate | A rate that remains unchanged for a defined period or full term. |
| Floating Interest Rate | A rate tied to a reference rate plus or minus a margin. |
| Variable Interest Rate | A rate that can change under contract terms or bank rules. |
| Blended Rate | A combined rate across balances, tranches, or old and new terms. |
| Contract Interest Rate | The rate specified in the legal agreement. |
| Face Interest Rate | The stated rate printed on an instrument or contract. |
| Rate type | Main risk question |
|---|---|
| Fixed | Is the quoted rate locked long enough for the intended use? |
| Floating | Which benchmark and margin drive the reset? |
| Variable | Who can change the rate, when, and under what notice or rule? |
| Blended | Which balances or tranches are being averaged? |
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A blended rate combines two or more interest rates into a weighted average borrowing, lending, or refinancing rate.
A contract interest rate is the stated rate in a loan, bond, deposit, or financial agreement.
The face interest rate is the stated coupon or contractual rate shown on a debt instrument or loan agreement.
A fixed interest rate stays unchanged for the agreed period, making payments more predictable than variable-rate pricing.
A floating interest rate changes with a reference benchmark or index under the terms of a loan or instrument.
A variable interest rate can change over time based on a benchmark, lender decision, or contractual adjustment rule.