Mortgage Recast Calculator
See your new monthly payment and total interest saved after recasting.
Updated · By Teodor-Cristian Lutoiu
A mortgage recast applies a lump-sum principal payment and recomputes your monthly payment over the remaining term at the same rate — typically for a $150–$500 one-time fee. A $50,000 recast on a $400,000 / 6.5% / 30-year mortgage 10 years in drops the monthly payment by roughly $320.
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How a mortgage recast works
A recast is one of mortgage math's best-kept secrets: you pay a lump sum of principal, the lender re-amortizes the loan over the remaining term at the same interest rate, and your monthly payment drops. The rate doesn't change. The term doesn't change. The balance drops, and the payment drops with it.
A recast is different from paying extra principal (same payment, loan pays off earlier) and different from a refinance (new rate, new term, new closing costs). It's the sweet spot when you:
- Got a windfall (bonus, inheritance, sale of another property) and want lower monthly payments without refinancing
- Bought a new home before selling your old one and are sitting on a "bridge" payment you want to bring down
- Have a great existing rate you don't want to give up
Rules and fees
Most lenders allow one or two recasts per loan, with these typical requirements:
- Minimum lump sum: usually $5,000 or $10,000. Some lenders require 10% of the remaining balance.
- Recast fee: $150–$500 flat. Compare this to thousands in refi closing costs.
- Loan type restrictions: Conventional only. Government-backed loans (FHA, VA, USDA) don't allow recasts. Jumbo loans vary by lender.
- Must be current on payments. No recasts if you're delinquent.
- Not all lenders offer it. Banks like Chase, Wells Fargo, and Bank of America do. Some credit unions and smaller servicers don't. Call and ask — the answer is binary.
A recast is permanent — once done, you have a new lower required payment. You can still pay extra on top of that and finish the loan early.
Formula
The new payment uses the standard amortization formula with the new (lower) principal, the same rate, and the same remaining term:
new_balance = current_balance − lump_sum
monthly_rate = APR / 12
r = monthly_rate
n = remaining_months
new_monthly_P_I = new_balance × (r × (1 + r)^n) / ((1 + r)^n − 1)
monthly_savings = current_monthly_P_I − new_monthly_P_I
total_interest_after = new_monthly_P_I × n − new_balance
total_interest_before = current_monthly_P_I × n − current_balance
interest_saved = total_interest_before − total_interest_after
The interest saved comes from two things combined: you're paying less principal over time (because of the lump sum), and you're paying less monthly interest (because the lower balance produces lower monthly interest charges for the rest of the loan).
Scenarios at a glance
Monthly payment reduction on a $400,000 / 6.5% / 30-year mortgage with 10 years elapsed (current balance ~$339,000, current payment $2,528):
| Lump sum | New balance | New monthly payment | Monthly savings | Lifetime interest saved |
|---|---|---|---|---|
| $20,000 | $319,000 | $2,416 | $130 | ~$27,000 |
| $50,000 | $289,000 | $2,192 | $322 | ~$68,000 |
| $100,000 | $239,000 | $1,815 | $700 | ~$135,000 |
A recast is almost always cheaper than a refinance for the same lump sum — no closing costs, no credit pull, same interest rate.
Worked example
Ravi has been in his home for 5 years. His mortgage:
- Original loan: $370,000 at 6%, 30-year fixed
- Current balance after 5 years: $300,000 (approximately)
- Remaining term: 25 years / 300 months
- Current monthly P&I: $1,933
He just inherited $50,000 and wants to reduce his monthly bill. He calls his servicer — they offer a recast for a $250 fee.
Plugging the numbers in:
- New balance: $300,000 − $50,000 = $250,000
- New monthly P&I: $1,611 (re-amortized over the same 25 years at 6%)
- Monthly savings: $322 — $3,862 a year, freed up every month
- Lifetime interest saved: ≈$46,400 over the remaining 25 years
Ravi kept his 6% rate (which is below current market, so a refi would have cost him more), didn't restart the amortization clock, paid a $250 fee, and will pay $322 less every month for the next 25 years.
If Ravi had instead applied the $50,000 as extra principal without recasting, his monthly payment would have stayed at $1,933 but the loan would pay off roughly 6 years earlier. Same total interest saved, different cash-flow shape. Recast for monthly savings; extra principal for faster payoff. Either is fine — pick what fits your situation.
FAQ
Recast vs refinance — which is better?
Depends on two things: (1) is today's market rate lower than your current rate? and (2) do you want to change the term? If current rates are lower, a refinance can beat a recast — you lower the rate AND the balance. If current rates are higher than your existing rate (the common case for anyone who bought before 2022), a recast is almost always better because it locks in your good old rate while still reducing the payment.
Recast vs extra principal — which is better?
Same total interest saved either way. Recast gives you lower monthly payments for the remaining term (better for cash flow). Extra principal keeps payments the same but pays the loan off years early (better for "I want to be mortgage-free"). Pick based on goal.
Do I need to qualify for a recast?
Usually no — no credit pull, no income verification. You're not taking on new debt; you're paying some off. The lender processes it as a simple servicing action.
How long does a recast take?
1–2 billing cycles from when the lump sum posts. Call your servicer to submit the recast request and send the fee; they process it and you get a letter with the new payment amount. Some lenders automatically apply a recast if the lump sum exceeds a threshold; others require a request.
Can I recast an FHA or VA loan?
No. Government-backed loans are amortized under HUD/VA rules that don't accommodate recasts. Your options are extra principal payments or a refinance.
Can I recast a refinance I just did?
Most lenders require the loan to be at least 90 days old before the first recast. Some require 6 months. Read the loan documents or call the servicer.
Does a recast hurt my credit?
No. No credit inquiry is made, and the recast doesn't change the reported loan status.
Last updated: April 23, 2026