Modal interchange in simple terms is borrowing chords from a parallel mode. The important thing to remember here is the borrowed chord is from a PARALLEL mode and not just any random key. And also how those borrowed chords are used and how many have been borrowed because the mood of the song can easily sway from the original mode to the one from the chords are borrowed from if too many chords have been used. Below we have an example with the key of C where a song is originally written in the key of C but modal interchange is used. We could use any mode for this but to keep it simple, we are only using the C natural minor (aeolian mode) for this. The C natural minor will have the following chords.

Cm    Ddim    Eb    Fm    Gm    Ab     Bb

So a progression such as C   G   Cm   F can be an example for a modal interchange where the progression is written in C but the Cm chord is borrowed from the parallel key. The borrowed chord gives the chord progression the flavour of the mode from which it has been borrowed. For example the natural minor has a sad sound to it and the borrowed Cm chord in this given example adds a certain degree of melancholy to the progression.

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