A blended interest rate in property development finance UK represents the weighted average of multiple financing costs across a development project. It accounts for varying interest rates applied to different loans, such as senior debt, mezzanine finance, or bridging facilities. Developers use the blended interest rate to assess total borrowing costs, compare funding options, and plan cash flow more accurately. Calculated by multiplying each loan’s interest rate by its proportion of total debt, then summing the results, it provides a single metric reflecting overall financing exposure, enabling better financial risk management and investment decision-making.
This sits beneath Weighted Average Cost Metrics, introducing a more specific variant of the measure without changing its core interpretation. It is commonly considered alongside Weighted Average Loan Margin, as both are closely related measures used to assess similar aspects of performance or risk.
View glossary entry