Mortgage Recast Calculator

How the mortgage recast calculator works

A recast is one of the simplest ways to cut a mortgage payment without touching your rate. You make a lump-sum payment toward principal, and the lender re-amortizes the loan — recalculating the payment on the new, smaller balance over the same remaining term. This calculator does exactly that: it works out your current payment, subtracts the lump sum from the balance, then amortizes the reduced balance over the same number of months at the same rate. The difference is your monthly saving, and because you now owe less, you also pay less total interest.

The beauty of a recast is what it does not change. Your rate stays put — valuable if you locked in a low one — and there is no credit check or full application, just a modest fee. That makes it very different from a refinance. If your real goal is to be mortgage-free sooner rather than to lower the payment, compare this with simply making the lump-sum payment and keeping your current amount on the payoff calculator.

Recast vs refinance vs paying off early

These three moves solve different problems. A recast lowers your required payment while keeping your rate and payoff date — ideal when you have a windfall and want breathing room, not a new loan. A refinance replaces the loan and can lower your rate or shorten the term, but it comes with closing costs and a full underwrite, so it wins mainly when rates have dropped. And if your aim is to be debt-free sooner, you can make the same lump-sum payment but decline the recast, keeping the higher payment so the loan ends years early and saves the most interest of all. The right choice depends on whether you value a lower payment or a shorter loan.

Who benefits most from a recast

Recasting shines for homeowners with a low locked-in rate and a lump sum from a bonus, sale or inheritance. Refinancing would mean giving up that rate; a recast lets them keep it and still cut the payment. It is also popular with buyers who bought a new home before selling the old one — once the old home sells, they recast the new mortgage with the proceeds. The main limits are eligibility and minimums: many government loans cannot be recast, and lenders require a minimum lump sum, so confirm the details with your servicer first.

Estimate only — not financial advice. Recast eligibility, minimum lump sums and fees vary by lender and loan type. Government loans (FHA, VA, USDA) generally cannot be recast. Confirm with your servicer.

How to use it & key terms

Enter your current balance, rate, remaining term, the lump sum and the recast fee, then press Calculate to see the new payment, the monthly saving and the interest saved.

Recast vs refinance vs extra payments

All three shrink the cost of a mortgage, but they work differently. A recast applies a lump sum to the principal and then re-amortizes the loan over the remaining term, lowering the monthly payment while keeping your existing rate — usually for a small fee and no credit check or appraisal. It shines when you have a windfall and a rate you would hate to lose.

A refinance replaces the loan entirely, so it can change your rate and term — powerful when rates have fallen, but it means closing costs, a credit check and a fresh clock. Extra monthly payments, by contrast, keep your payment the same but shorten the term, which typically saves the most total interest of the three. A quick rule of thumb: recast to lower the payment, refinance to lower the rate, and pay extra to get out of debt sooner.

Which loans qualify — and the ground rules

Recasting is a quiet feature: many borrowers never hear of it, and not every loan offers it. As a rule, conventional loans backed by the major secondary-market investors can usually be recast, while government-backed mortgages — FHA, VA and USDA — generally cannot. Jumbo loans vary by lender. Because it is a servicer policy rather than a legal right, the only reliable way to know is to ask your servicer whether your specific loan is eligible before you count on it.

If it is eligible, a few common ground rules apply. Lenders typically require a minimum lump sum before they will recast — often a set dollar amount or a percentage of the balance — so a very small extra payment will reduce your balance but not trigger a recalculation. There is usually a modest processing fee. Your account generally has to be current, and some servicers limit how often you can recast over the life of the loan. None of this involves a credit check, an appraisal, or income documents, which is exactly what makes a recast so much lighter than a refinance.

The mechanics are worth understanding clearly. A recast keeps your interest rate and your payoff date untouched. The lender takes your reduced balance and re-amortizes it over the number of months remaining, producing a smaller required payment. You are not shortening the loan; you are lowering the monthly obligation on a loan that still ends on the original schedule. The interest you save comes purely from carrying a smaller balance for the rest of the term.

That makes a recast a cash-flow tool more than a payoff tool. It shines in a few specific situations: after a windfall such as a bonus, inheritance or the sale of another property; when you have bought a new home before selling the old one and want to apply the sale proceeds to lower the new payment; or any time you hold a rate you would be reluctant to give up in today's market. If your goal instead is to be debt-free sooner, keeping the payment the same and applying extra to principal will finish the loan earlier and save more total interest — a recast deliberately does the opposite by easing the monthly amount.