Recast Mortgage Calculator
A mortgage recast re-amortizes your remaining loan balance after a lump-sum principal payment, lowering your monthly payment without changing your interest rate or loan term — unlike a refinance.
Refinancing gets all the attention, but it costs $3,000–$6,000 in closing costs, requires a credit check, an appraisal, and income verification — and if your current rate is below 5%, a refinance at today’s rates makes your payment higher, not lower. A mortgage recast does one thing: you pay a large lump sum toward principal, your lender re-amortizes the remaining balance over the same remaining term at the same interest rate, and your monthly payment drops. No new loan, no closing costs, no credit check. The mortgage recast calculator above shows exactly how much your payment falls and how much interest you save before you hand over the lump sum.
How Recasting a Mortgage Works
Three things stay unchanged after a recast: your interest rate, your loan term, and your loan documents. One thing changes: the monthly payment, recalculated against the lower balance. You pay a one-time recast fee — typically $150–$500 depending on the lender — and the new payment takes effect on the next billing cycle after processing, which usually takes 30–60 days.
Example: $400,000 balance at 6.50%, 25 years remaining. Current payment: $2,701/month. You apply a $100,000 lump sum. New balance: $300,000. New payment recalculated over the same 25 years at 6.50%: $2,026/month. Monthly savings: $675. Recast fee of $250 is recovered in less than two weeks of savings. Total interest saved over the remaining term: approximately $202,000.
Recast vs. Refinance vs. Extra Payments
| Mortgage Recast | Refinance | Extra Principal Payments | |
|---|---|---|---|
| Monthly payment | Lower immediately | Depends on new rate | Unchanged |
| Interest rate | Unchanged | New market rate | Unchanged |
| Loan term | Unchanged | Resets to new term | Shortens |
| Cost | $150–$500 fee | $3,000–$6,000+ closing costs | None |
| Credit check required | No | Yes | No |
| Appraisal required | No | Usually yes | No |
| Total interest saved | Significant | Significant if rate drops | Most — term shortens |
| Best when | You have a good rate and want lower payments | Today’s rates are materially lower than yours | You want to pay off faster, payment size doesn’t matter |
Monthly Payment Reduction by Lump Sum Size
On a $350,000 balance at 6.50% with 25 years remaining (current payment: $2,363/month):
| Lump Sum Applied | New Balance | New Monthly Payment | Monthly Savings | Interest Saved |
|---|---|---|---|---|
| $25,000 | $325,000 | $2,194 | $169/mo | ~$50,700 |
| $50,000 | $300,000 | $2,025 | $338/mo | ~$101,400 |
| $75,000 | $275,000 | $1,856 | $507/mo | ~$152,100 |
| $100,000 | $250,000 | $1,688 | $675/mo | ~$202,500 |
Who Can Recast a Mortgage — and Who Can’t
Conventional loans backed by Fannie Mae or Freddie Mac are eligible for recasting, subject to lender approval. The lender — or more precisely, the loan servicer — must agree to process it, and most do for standard conventional mortgages. Government-backed loans are a different story: FHA, VA, and USDA loans do not support standard recasting. Jumbo loans are at the lender’s discretion — some allow it, some don’t. Check your loan type before planning around a recast.
Most lenders also require a minimum lump sum — commonly $5,000–$10,000, sometimes $25,000. Below that threshold, they won’t process the re-amortization. Some servicers limit how frequently you can recast (typically once every 12 months). Call your servicer directly to confirm eligibility, minimum lump sum, fee, and processing timeline before running the numbers.
When Recasting Makes More Sense Than Refinancing
If your current mortgage rate is below 5% — locked in 2020 or 2021 — refinancing at today’s 6.5%+ market rate would increase your monthly payment even if you extract no cash. Recasting is the only way to lower your payment while keeping that rate intact. A homeowner with a 3.25% rate and a $50,000 windfall has one sensible choice for payment relief: recast.
Recasting also makes practical sense when you’ve sold a previous home and the proceeds arrive after you’ve already closed on the new one. Rather than carrying both payments through a bridge period and then sitting on cash, applying the sale proceeds to the new mortgage and recasting immediately lowers the payment to a sustainable level without any of the friction of a refinance.
What Recasting Doesn’t Do
A recast does not shorten your loan term. If you have 25 years remaining and recast with a $75,000 lump sum, you still have 25 years remaining — your payment is lower but the payoff date is unchanged. If paying off the mortgage faster is the goal, making extra principal payments or refinancing to a shorter term accomplishes that; recasting does not.
It also doesn’t lower your interest rate. On a 6.50% loan, recasting gives you a lower payment at 6.50% — your interest cost per dollar of outstanding balance is identical before and after. If today’s rates drop meaningfully below your current rate, refinancing becomes worth revisiting regardless of what a recast could offer.
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A mortgage recast is when you make a large lump sum payment toward your principal and your lender recalculates your monthly payment based on the new, lower balance — over the same remaining term at the same rate. Your rate, loan term, and documents stay unchanged; only the monthly payment drops. Most lenders charge $150–$500 and take 30–60 days to process.
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No. A recast doesn't involve a new loan, a credit application, or a hard inquiry. It's an administrative adjustment to an existing loan — your credit file is completely untouched. This is one of the key advantages over refinancing, which triggers a hard pull and resets your loan origination date.
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Most lenders require a minimum lump sum of $5,000–$25,000 to process a recast. Even $25,000 on a $350,000 balance at 6.50% saves approximately $169/month and $50,700 in lifetime interest. Call your loan servicer to confirm their specific minimum — it varies by lender and some cap recast frequency at once per 12 months.
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Extra payments save more total interest because they shorten the loan term. Recasting saves significant interest while also immediately reducing the required monthly payment. If cash flow relief is the goal, recast. If paying off the mortgage faster is the goal, extra payments win. The optimal approach for many homeowners: make the lump sum, recast for the lower payment, then continue voluntarily paying the old amount — delivering both the payment reduction and the faster payoff.