Mortgage Recast Calculator
Make a lump sum payment and recast your mortgage to lower your monthly payment. See exactly how much you'll save each month without refinancing.
How Mortgage Recasting Works
A recast starts with a lump sum payment—usually $10,000 or more, depending on your lender's rules. After the payment clears, your servicer recalculates your monthly payment based on the new lower balance, spread over the remaining months of your original loan term.
Your interest rate doesn't change. Your loan term doesn't change. Only the monthly payment changes. If you owed $280,000 with 25 years left and make a $30,000 lump payment, your new payment is based on $250,000 over the remaining 300 months. That drops your payment by $200 to $300 depending on your rate.
Most lenders charge $150 to $500 for the service. You fill out a form, make the lump payment, and within 30-60 days your new lower payment takes effect. No credit check, no appraisal, no closing costs. It's the simplest way to reduce your payment without refinancing.
When Recasting Makes Sense
Recasting is ideal if you received a windfall—inheritance, bonus, stock sale—and want to improve monthly cash flow without changing your interest rate. Maybe you got a $50,000 inheritance and your mortgage is at 4.5%. Refinancing would cost $3,000 and rates are now 7%. A recast costs $250, keeps your 4.5% rate, and lowers your payment by $300/month.
It's also smart for people who sold a previous home and used the equity for a down payment but still have cash left over. You can put 20% down to avoid PMI, then recast a few months later with the remaining sale proceeds to lower your payment further.
Avoid recasting if you plan to sell the home soon. The $300 recast fee takes several months to recoup through payment savings. If you're moving in a year, just make the lump payment without recasting and enjoy the interest savings.
Recast vs. Extra Payments vs. Refinance
Extra payments without recasting keep your monthly payment the same but shorten your loan. You build equity faster and save interest, but you don't get the cash flow relief. This is best if you're financially stable and want to pay off the loan early.
Recasting lowers your monthly payment but keeps the loan term the same. You save interest from the lump payment but not from recasting itself. This is best if you need breathing room in your monthly budget.
Refinancing can lower your rate and payment but costs thousands and resets your loan term. It makes sense if rates dropped significantly since you bought. If rates are higher now, recasting is far cheaper and simpler than refinancing.
Frequently Asked Questions
What is a mortgage recast?
Also called re-amortization, it recalculates your monthly payment based on a lower balance after you make a lump sum payment. Your interest rate and loan term stay the same, but your payment drops.
How is a recast different from refinancing?
A recast keeps your current loan and rate. You just pay a fee ($150-$500) to recalculate the payment. Refinancing replaces your loan entirely, which costs $2,000-$5,000 and requires credit checks and appraisals.
Do all lenders allow recasting?
No. FHA, VA, and USDA loans cannot be recast. Many conventional lenders allow it, but some have minimum lump sum requirements ($5,000 to $10,000). Check with your servicer.
Will a recast save me interest?
Only indirectly. The lump sum payment saves interest by reducing principal. The recast itself just spreads the new balance over the remaining months to lower your payment. You save the same interest whether you recast or not after making the lump payment.
Should I recast or just make extra payments?
Recast if you need lower monthly payments for cash flow. If you don't need the payment reduction, skip the recast fee and just keep making the same payment—you'll pay off the loan faster instead.