Recasting is cheaper (a small servicer fee) but doesn't change your rate. Refinancing changes the rate and term but has closing costs and underwriting. If your rate is already favorable, recast usually wins. If rates have dropped meaningfully or you need a different loan type, refinance.

Are recasts always allowed?

No. Many servicers offer them, often with a minimum lump sum and a small fee. Government loans (FHA, VA, USDA) typically don't allow recasting. Always confirm with your servicer before counting on a recast.

Does a recast lower my interest rate?

No. A recast keeps your existing rate; it only re-amortizes the smaller principal over the remaining term. To change your rate, you need to refinance.

Will a recast shorten my loan term?

Not by default. Your maturity date stays the same. To shorten the term, either keep paying the old monthly amount voluntarily (the 'Keep old payment' scenario) or apply the lump sum as an extra principal payment instead of asking for a recast.

How is a recast different from just paying extra principal?

Both reduce total interest. An extra principal payment without a recast keeps your monthly payment the same and shortens the term. A recast keeps the term and shortens the monthly payment. Pick by which one fits your goal — cash flow vs. payoff speed.

Mortgage Recast Calculator

A recast lowers your monthly payment without changing your rate or term. See three scenarios so you can choose between cash-flow relief and faster payoff.

Mortgage Recast Scenario

Generated … · Assumption set 2026-04-30

New monthly payment

$1,481.89/mo

Old monthly payment

$1,804.04

Monthly reduction

$322.15

New principal

$230,000

Recast fee

$250.00

Recast fees vary
Servicers charge different recast fees and have different minimum lump-sum requirements. Confirm the actual fee with your servicer.

Three scenarios compared

Lifetime interest by strategy

No recast (status quo)$261,214.77

Recast and pay the lower payment$214,569.34

Recast but keep paying the old payment$136,996.90 (lowest interest)

Assumptions used

Assumption set 2026-04-30

Current balance: $280,000user input
Annual interest rate: 6.00%user input
Loan term: 25 yearsuser input
Lump-sum principal: $50,000user input
Recast fee: $250user input
Calculated current payment: $1,804.04calculated

How this calculator works

With a recast, you make a lump-sum principal payment and your servicer re-amortizes the remaining balance over the same rate and the same remaining term. Your monthly payment drops, but you still owe the same number of months unless you keep paying extra voluntarily. Recasting is generally cheaper and simpler than refinancing because there's no new loan, no new appraisal, and no credit pull — but it doesn't change your rate.

Reviewed for calculation accuracy and clarity by the Mortgage Well Calculation Review Team · June 8, 2026

When to use this

You have a large lump sum (bonus, inheritance, sale proceeds) and want lower monthly payments.
Your rate is already favorable so refinancing isn't attractive, but you want cash-flow relief.
You want to reduce your payment without restarting the clock with a fresh 30-year term.

Methodology

We compute the new principal as current balance minus your lump sum, then re-amortize that principal over the remaining term at the same rate. Three strategies are compared: do nothing, recast and pay the lower payment, or recast and voluntarily keep the old payment.

new_principal = current_balance - lump_sum
new_payment = amortized_payment(new_principal, remaining_term, rate)

Assumptions

Recast fees vary by servicer; the calculator surfaces the fee but doesn't add it to principal.
Government loans (FHA / VA / USDA) typically don't allow recasting.
The interest rate and remaining term are unchanged by the recast.
Servicers commonly require a minimum lump sum (often $5,000–$10,000) and the loan to be in good standing.

Recast vs. refinance — what actually changes

Both moves can lower your monthly payment, but the mechanics are completely different:

Recast. Same loan, same rate, same maturity date. Smaller balance ⇒ smaller scheduled payment. Typical cost: a flat servicer fee in the low hundreds. No credit check, no income verification, no appraisal.
Refinance. A new loan that pays off the old one. New rate, new term, new closing costs (often $3,000–$10,000+). Underwriting includes credit, income, and appraisal. Resets the payoff clock unless you choose a matching term.

If your current rate is already low, a recast usually wins purely on cost. If rates have dropped meaningfully or you need to change loan type (ARM → fixed, cash-out), a refinance is the right tool. Try both calculators side by side.

When a recast may be worth it

You have a sizable lump sum you don't need for short-term liquidity.
You want lower required payments without giving up your existing rate.
You don't want underwriting friction (job change, self-employment, credit dings).
Your loan and servicer permit a recast (most conventional loans do).

When a recast may not help

Government loans — FHA, VA, and USDA generally do not allow re-amortization recasts.
You actually want to be debt-free faster. A recast lowers the payment but does not shorten the term unless you keep paying the old amount voluntarily.
You'd rather invest the lump sum at an expected return higher than your mortgage rate, after tax considerations.
Your emergency fund isn't fully built yet. Recast cash is locked into home equity until you sell or borrow against it.

Common lender requirements

Servicer rules vary, but common requirements include: a minimum lump sum (often $5,000–$10,000 or 10% of principal), the loan being current and seasoned a few months, a small recast fee (commonly $150–$500), and a written request to the servicer. Conventional loans backed by Fannie Mae or Freddie Mac generally support recasts; FHA/VA/USDA generally don't. Always confirm specifics with your servicer in writing — these numbers are illustrative ranges, not promises.

Worked example

A $50,000 lump sum on a $280,000 / 6% / 25-year loan can lower your monthly payment by several hundred dollars. If you keep paying the original payment voluntarily, you save the most lifetime interest. The 'Keep old payment' scenario in the calculator shows that exact comparison.

Frequently asked

Recast or refinance?: Recasting is cheaper (a small servicer fee) but doesn't change your rate. Refinancing changes the rate and term but has closing costs and underwriting. If your rate is already favorable, recast usually wins. If rates have dropped meaningfully or you need a different loan type, refinance.
Are recasts always allowed?: No. Many servicers offer them, often with a minimum lump sum and a small fee. Government loans (FHA, VA, USDA) typically don't allow recasting. Always confirm with your servicer before counting on a recast.
Does a recast lower my interest rate?: No. A recast keeps your existing rate; it only re-amortizes the smaller principal over the remaining term. To change your rate, you need to refinance.
Will a recast shorten my loan term?: Not by default. Your maturity date stays the same. To shorten the term, either keep paying the old monthly amount voluntarily (the 'Keep old payment' scenario) or apply the lump sum as an extra principal payment instead of asking for a recast.
How is a recast different from just paying extra principal?: Both reduce total interest. An extra principal payment without a recast keeps your monthly payment the same and shortens the term. A recast keeps the term and shortens the monthly payment. Pick by which one fits your goal — cash flow vs. payoff speed.

Sources and references

Helpful consumer references used to explain assumptions on this page. These are educational pointers, not regulatory endorsement.

Consumer Financial Protection Bureau (CFPB) — consumer mortgage education and general guidance
Fannie Mae — single-family mortgage education — general consumer references on conventional loan servicing concepts
Freddie Mac — homeowner education — general consumer references on conventional loan servicing concepts
Internal — standard amortization formula — fully-amortizing fixed-rate payment formula; identical math used throughout the engine

Estimates only. This calculator is not a loan offer, loan approval, official Loan Estimate, Closing Disclosure, tax advice, legal advice, or financial advice. Actual payments, rates, taxes, insurance, mortgage insurance, closing costs, and loan terms may vary. Contact a qualified lender, tax professional, or financial advisor for guidance.