Mortgage WellMortgage recast vs. refinance — calculator comparison
Both moves can lower your monthly payment. The mechanics, costs, eligibility, and side effects are completely different — and choosing wrong can cost thousands. This guide pairs each scenario with the right calculator.
Quick comparison
| Dimension | Recast | Refinance |
|---|---|---|
| Changes the rate | No | Yes |
| Resets the term | No | Possibly (depends on the new term) |
| Typical cost | $150–$500 servicer fee | $3,000–$10,000+ closing costs |
| Requires lump sum | Yes (often $5,000–$10,000 minimum) | No |
| Credit / income / appraisal | Usually no | Yes |
| Available on FHA / VA / USDA | Usually no | Yes |
When recast is the better tool
- You have a sizable lump sum and a favorable existing rate.
- You want lower required payments without paying closing costs.
- You don't want underwriting friction.
- Your servicer permits a recast on your loan type.
When refinance is the better tool
- Rates have dropped meaningfully since you took out your loan.
- You want to switch loan type (ARM to fixed, jumbo to conforming).
- You want to take cash out of equity.
- You don't have a lump sum but want a different rate or term.
Cost comparison in plain English
On a $300,000 balance, a recast typically costs a flat fee in the low hundreds. A refinance on the same balance often costs $4,500–$9,000 in closing costs, which you either pay at closing or roll into the new loan principal. If your rate isn't materially better, the refinance has to recover those costs in monthly savings before it pays off — which can take years. The recast doesn't need a payback period.
Credit and income verification caveat
A refinance is a brand-new loan, so the lender re-verifies credit, income, employment, and home value. If anything has changed since your original underwriting (new self-employment, a recent late payment, lower appraisal), the new loan may price worse than expected — or be denied. A recast generally doesn't reopen underwriting. That predictability is part of why recasts appeal to people whose financial picture has gotten more complicated since closing.
Which calculator should I open first?
- Have a lump sum, like your rate: open the Recast Calculator first.
- Rates have dropped or you want to change loan type: open the Refinance Calculator first.
- Want faster payoff, not lower payments: consider the Extra Payment Calculator instead.
Frequently asked
- Can I recast and then refinance later?
- Yes, sequentially. After a refinance you have a new loan, so any future recast eligibility is governed by the new servicer's rules.
- Will a recast reset my loan term?
- No. Your maturity date stays the same. Only the scheduled monthly payment changes.
- Is a recast available on every loan?
- Most conventional loans support recasts, but government loans (FHA, VA, USDA) generally don't. Always confirm with your servicer before counting on a recast.
Sources and references
Helpful consumer references used to explain assumptions on this page. These are educational pointers, not regulatory endorsement.
- CFPB — refinancing your mortgage — consumer guidance on when refinancing makes sense and what closing costs to expect
- Fannie Mae / Freddie Mac — homeowner education — general references on conventional loan modifications and recasts