Skip to content

Loans & mortgages

Mortgage Recast Calculator

See how a lump-sum payment plus a recast lowers your monthly mortgage payment, and how much interest it saves versus doing nothing.

Private · on device. Calculated in your browser, nothing you type is sent anywhere

Quick answer

A recast applies a lump sum to your balance and re-computes the payment over the unchanged term. Unlike refinancing, your rate and term stay the same, you pay a small fee (typically $150–500) instead of closing costs, and your required payment drops permanently.

Typically $150–500.

New monthly payment
$1,607.85
Current payment
$1,957.38
Monthly saving
$349.53
Interest saved over the term
$46,470.92
Recast fee
$250.00
Net saving after the recast fee
$46,220.92

The term and rate stay unchanged, only the required payment falls. Keep paying the old amount and the lump sum shortens the loan instead.

Formulas last verified 2026-10-10. Results are estimates, not financial advice. How we calculate.

When a recast is the right move

The classic cases: you sold a previous home after buying the next one, received a bonus or inheritance, or simply accumulated savings earning less than the mortgage costs. A recast converts that lump sum into a permanently lower obligation without touching a rate you may never see again.

The calculator shows both figures that matter: the new payment (what changes your monthly budget) and the interest saved over the remaining term (what changes your net worth), netting off the fee.

Worked example

$280,000 remaining at 6.5% with 23 years to go: the payment is $1,946. Apply a $50,000 lump sum and recast: the new balance of $230,000 over the same 23 years produces a payment of $1,598, about $348/month freed, and roughly $46,000 less interest over the remaining term.

The decision grid

Your situationBetter tool
Have cash; rate below today's market; want lower paymentRecast
Have cash; want the loan gone soonerExtra principal payments
Rate well above today's marketRefinance (run the break-even)
Payment unaffordable, no lump sumTalk to the servicer about modification, different problem, different tool

The opportunity-cost question

A lump sum into the mortgage "earns" the loan rate, guaranteed and tax-free. Whether that beats investing the money depends on your rate and your alternatives: against a 6.5% mortgage, a guaranteed 6.5% is genuinely hard to beat on a risk-adjusted basis; against a 3% pandemic-era rate, an index fund has a strong case instead. There is no universal answer, but the guaranteed number is the honest benchmark, and it is the one this page computes.

One caution: money recast into the house is illiquid. Keep the emergency fund out of the lump sum, equity is expensive to un-extract exactly when you need it most.

Frequently asked questions

What exactly is a mortgage recast?

You pay a lump sum toward principal and the servicer re-amortizes the reduced balance over your existing term at your existing rate, producing a lower required payment. No new loan, no credit check, no appraisal, typically just a $150–500 processing fee and a minimum lump sum (often $5,000–10,000).

Recast vs refinance, which one do I want?

They solve different problems. Recast: you have cash and want a lower payment while keeping your current rate, ideal when your rate is better than today's market. Refinance: today's rates are meaningfully below yours, and you are willing to pay closing costs to switch. If your rate is low and you have a windfall, recast; if your rate is high, run the refinance break-even first.

Recast vs just making an extra payment?

The same lump sum saves more interest as a plain extra principal payment, because the loan keeps the old (higher) required payment and ends years early. A recast instead lowers the required payment and keeps the original end date. Extra payment = pay less interest; recast = lower obligation and monthly breathing room. You can also recast and voluntarily keep paying the old amount, the best of both, with flexibility.

Do all lenders allow recasting?

Most conventional loans can be recast; FHA, VA and USDA loans generally cannot, and some servicers simply refuse. There is one way to find out: call and ask for their recast policy, minimum lump sum and fee before you send any money.

Does a recast change my interest rate or term?

No, that is its defining feature. The rate and the payoff date stay exactly as they were; only the balance and the required monthly payment drop. If you want a shorter term, a recast is the wrong tool.

Related calculators