Michael and Rachelle have 18 months remaining on their five-year mortgage term at an annual interest rate of 4 percent compounded semi-annually. The current five-year fixed rate of interest for a mortgage is 2 percent compounded semi-annually. What will be their new mortgage interest rate if they "blend-and-extend" their mortgage for another five-year, or 60-month, term?

A. 3.4%

B. 2.6%

C. 2%

D. 4%