Mortgage Recast Calculator
Calculate your new lower monthly payment after making a lump-sum principal reduction and recasting your mortgage.
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Visualization
How It Works
Mortgage recasting (or reamortization) lets you make a large lump-sum payment toward your principal, then have your lender recalculate your monthly payment based on the new, lower balance — keeping your existing interest rate and remaining term. Unlike refinancing, recasting does not change your rate or require a credit check, and costs only a small administrative fee.
The Formula
Variables
- NewBalance — Loan balance after the lump-sum principal payment
- r — Monthly interest rate (unchanged from original loan)
- n — Remaining months on the loan (unchanged from original loan)
Worked Example
You owe $320,000 at 6.5% with 27 years remaining. Current payment: $2,160/month. You make a $50,000 lump-sum payment, reducing the balance to $270,000. After recasting, your new payment is $1,823/month — saving $337/month. Total interest saved over the remaining term: $109,000+.
Practical Tips
- Recasting keeps your existing interest rate, which is valuable if your current rate is lower than today's rates.
- Most lenders require a minimum lump-sum payment of $5,000-$10,000 to recast.
- Government-backed loans (FHA, VA, USDA) typically cannot be recast — this is mainly for conventional loans.
- Compare recasting vs. refinancing: recast is cheaper and simpler but does not change your rate or term.
- Consider making extra payments instead if you want to shorten your loan term rather than lower your payment.
Frequently Asked Questions
What is the difference between recasting and refinancing?
Recasting keeps your existing loan — same rate, same term, same lender — and simply re-amortizes the balance after a lump-sum payment. Refinancing replaces your loan entirely with a new one, potentially at a different rate and term. Recasting costs $150-$500; refinancing costs $2,000-$6,000+ in closing costs.
When does a mortgage recast make sense?
Recasting is ideal when you have a large sum of money (inheritance, bonus, sale proceeds) and want lower monthly payments without the cost or hassle of refinancing — especially if your current rate is already competitive.
Can all mortgages be recast?
Most conventional conforming loans can be recast. FHA loans, VA loans, and USDA loans generally cannot be recast. Jumbo loans may or may not qualify depending on the lender. Check with your loan servicer.
Is a recast the same as making extra payments?
No. Extra payments reduce your balance and shorten your term, but your required monthly payment stays the same. A recast reduces your required monthly payment while keeping the same remaining term. Both save interest, but in different ways.
How long does a mortgage recast take?
Most lenders process a recast in 2-4 weeks. You make the lump-sum payment and submit a recast request form. The new payment amount typically takes effect within one to two billing cycles.