blended rate

An interest rate applied to a refinanced loan that is higher than the rate of the old loan but lower than the current rate offered on new loans. Blended rates are usually offered by lenders as incentives for borrowers to refinance existing low-interest rate loans instead of offering a purchaser the chance to assume the loan. For example, if current rates are 10 percent, and a buyer can assume a loan at 7 percent, the lender may offer 8 percent financing to entice the buyer to get new financing instead of assuming the old mortgage.