This paper presents a new binaural auralization algorithm suitable for mobile devices. A stereo-to-multichannel virtual upmix technique was utilized to expand the spatial dimension of stereo audio to a multichannel speaker space. In order to enhance subjective preferences and listener envelopment, reflections of the primary sound component were artificially generated by modeling a virtual ceiling and sidewalls based on concert hall acoustics. The uncorrelated ambient components were then distributed over spatial points at different azimuth and elevation angles. Computational efficiency was achieved by removing the redundant operations in each stage of the algorithm. Subjective tests were performed, and the results showed that the proposed algorithm significantly improves spatial perceptions of stereo audio being played over headphones.