Mortgage Recast Calculator
See the new payment after a lump-sum mortgage recast, the interest it saves, and how recasting compares with just prepaying and keeping the same payment.
Mortgage Recast Calculator: with the default inputs, new monthly payment is $1,901.11.
The payoff balance today, not the original loan amount.
Your existing note rate — a recast does not change it.
Most servicers require $5,000–$10,000 minimum before they will recast.
Typically $150–$500. Compare with $3,000–$6,000 of closing costs on a refinance.
Principal and interest after the recast. Taxes and insurance are unchanged.
- Payment before the recast
- $2,228.89
- Monthly payment drop
- $327.78
- Interest saved by recasting
- $56,200Compared with keeping the loan as it is — before the recast fee.
- Interest saved after the fee
- $55,950
- Balance after the lump sum
- $290,000
- Interest saved if you prepay and keep paying the old amount
- $168,799
- Payoff time if you keep the old payment
- 18 years, 10 months
- Extra interest the recast costs vs. keeping the old payment
- $112,599The price of the lower payment: recasting stretches the same principal over the full remaining term.
Assumptions
- Fixed rate, monthly compounding, level payments — the standard amortization formula.
- The remaining term is unchanged by the recast; only the balance and therefore the payment change.
- Principal and interest only. Escrowed taxes, insurance, PMI and HOA are unaffected.
- The prepayment comparison assumes you keep making the original payment every month until the loan is gone.
| Option | Monthly payment | Payoff | Interest from here |
|---|---|---|---|
| Do nothing | $2,228.89 | 27 years | $382,159 |
| Recast (fee $250) | $1,901.11 | 27 years | $326,209 |
| Prepay, keep the old payment | $2,228.89 | 18 years, 10 months | $213,360 |
Same rate and same lump sum in every row. Recasting buys a smaller payment; prepaying without a recast buys a shorter loan.
How this is worked out
The formula
New balance = current balance − lump sum New payment = P' × r(1 + r)^n ÷ ((1 + r)^n − 1) P' = balance after the lump sum r = monthly rate (annual ÷ 12) — unchanged by a recast n = payments remaining — also unchanged by a recast Interest saved = (old payment × n − balance) − (new payment × n − new balance)
Open How it’s calculated above to see this worked through with your own numbers.
What you enter
- Current loan balance
- The payoff balance today, not the original loan amount.in dollars · 0 or more · defaults to 340000
- Interest rate
- Your existing note rate — a recast does not change it.a percentage · from 0 to 30 · defaults to 6.5
- Years left on the loan
- A number.from 0 to 40 · whole numbers only · defaults to 27
- …plus months
- A number.from 0 to 11 · whole numbers only · defaults to 0
- Lump sum toward principal
- Most servicers require $5,000–$10,000 minimum before they will recast.in dollars · 0 or more · defaults to 50000
- Recast fee
- Typically $150–$500. Compare with $3,000–$6,000 of closing costs on a refinance.in dollars · 0 or more · defaults to 250
What you get back
- New monthly paymentmain answer
- Principal and interest after the recast. Taxes and insurance are unchanged.
- Payment before the recast
- Monthly payment drop
- Interest saved by recasting
- Compared with keeping the loan as it is — before the recast fee.
- Interest saved after the fee
- Balance after the lump sum
- Interest saved if you prepay and keep paying the old amount
- Payoff time if you keep the old payment
- Extra interest the recast costs vs. keeping the old payment
- The price of the lower payment: recasting stretches the same principal over the full remaining term.
What this assumes
- Fixed rate, monthly compounding, level payments — the standard amortization formula.
- The remaining term is unchanged by the recast; only the balance and therefore the payment change.
- Principal and interest only. Escrowed taxes, insurance, PMI and HOA are unaffected.
- The prepayment comparison assumes you keep making the original payment every month until the loan is gone.
About this calculator
A recast — servicers also call it re-amortization — is the quiet third option between refinancing and doing nothing. You hand the servicer a lump sum, they apply it to principal, and then they re-run the amortization formula on the smaller balance over the same remaining term at the same rate. Your rate does not change, your payoff date does not change, and your monthly payment drops.
Recast vs. refinance vs. plain prepayment
- Refinancing replaces the loan. New rate, new term, a full underwrite, and $3,000–$6,000 of closing costs. It is the only one of the three that can lower your interest rate.
- Recasting keeps the loan. One phone call, a $150–$500 fee, usually no credit check or appraisal. It cannot lower your rate — only your payment.
- Prepaying puts the same lump sum against principal but leaves the payment alone. The extra keeps flowing to principal each month, so the loan ends early.
Prepaying always saves the most interest, because every dollar of the old payment above the new required amount keeps retiring principal. Recasting deliberately gives that up in exchange for permanently lower required cash flow. The table above prices that trade for your numbers: the "extra interest the recast costs" line is exactly what the lower payment is buying.
When a recast is the right call
- You sold a house, got a bonus or inherited money, and want your fixed monthly obligation to fall — not just your balance.
- You are bridging two homes and bought before selling; a recast after the old house sells resets the payment on the new loan.
- Your rate is already good. Refinancing a 3% loan in a 6% market to lower a payment would be an expensive mistake; a recast lowers the payment while keeping the 3%.
The fine print
Not every loan is eligible. FHA, VA and USDA loans generally cannot be recast, and neither can most loans that have been securitized into certain pools. Servicers usually require a minimum lump sum (commonly $5,000 or $10,000), a minimum resulting principal reduction, and a clean payment history. Ask for it in writing: some servicers apply a lump sum as a "principal curtailment" that shortens the term instead, which is the prepayment case, not a recast.
What this calculator leaves out
Only principal and interest are modelled. Property tax, insurance, PMI and HOA are unchanged by a recast, so your escrowed payment falls by the same dollar amount shown here, not by the same percentage. The comparison also ignores what else you could do with the lump sum — against a 6.5% mortgage you are earning a guaranteed 6.5% pre-tax, which is a good but not unbeatable return.
Frequently asked questions
▸What is a mortgage recast?
Your servicer applies a lump sum to principal, then recalculates the monthly payment on the smaller balance over the same remaining term at the same rate. The payment drops; the rate and payoff date stay put.
▸Is recasting better than refinancing?
It is cheaper and simpler — a few hundred dollars versus several thousand — but it cannot change your rate. Recast when your rate is already good and you want a lower payment; refinance when rates have fallen meaningfully.
▸Does a recast save more interest than just prepaying?
No, less. Prepaying the same amount and continuing to pay the old monthly figure retires the loan sooner and saves strictly more interest. A recast trades some of that saving for a permanently lower required payment.
▸How much does a mortgage recast cost?
Usually $150 to $500, and servicers typically require a minimum lump sum of $5,000 to $10,000. There is normally no appraisal, no credit pull and no new closing costs.
▸Which loans can be recast?
Most conventional Fannie Mae and Freddie Mac loans. FHA, VA and USDA loans generally cannot be recast, and jumbo rules vary by servicer. Ask your servicer before you send the money.
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