Mortgage Recast Calculator

What is a mortgage recast?

A mortgage recast is an underrated loan modification that applies a large principal payment to your mortgage without changing your interest rate, loan term, or payment schedule for other aspects. After the recast, your lender recalculates your payment based on the lower principal balance over the remaining loan term. The result: a lower monthly payment, immediately.

How recast differs from refinancing

Refinancing replaces your entire loan with a new one. Recasting keeps your original loan and simply reduces the balance. This distinction matters:

• Cost: Recast typically costs $100–$500. Refinancing costs $2,000–$5,000 in closing costs.
• Credit check: Recast does not require a new credit check or approval. Your lender verifies the payment and recalculates.
• Interest rate: Recast keeps your existing rate. Refinancing locks in a new rate (which may be higher or lower).
• Term: Recast keeps your original term (e.g., 30 years). Refinancing can change it to 15, 20, or 30 years.
• Speed: Recast is processed in days. Refinancing takes 30–45 days.

If you want a lower payment immediately and your current interest rate is good, a recast is often the better choice. Use this mortgage recast calculator to compare recast savings to your refinancing options with our Refinance Calculator.

When to use a mortgage recast

You received a large lump sum

An inheritance, bonus, settlement, or large sale can fund a recast. If you received $50,000 and your mortgage balance is $400,000, a recast applies the $50,000 to principal, reducing your balance to $350,000. Over your remaining 25 years, your payment drops significantly.

Your interest rate is already good

If you have a 4.5% rate in a 7% environment, refinancing makes no sense. A recast preserves your low rate while reducing your payment through principal paydown.

You want the lowest-cost payment reduction

Recasting is often cheaper than refinancing by $1,500–$5,000. If you are on a budget, a recast offers payment relief with minimal friction.

You want to avoid another credit check

Multiple credit inquiries can ding your score. If you have already refinanced recently or are planning other major borrowing, a recast avoids this issue.

Key numbers in a recast

New loan balance

Current balance minus lump sum payment. This is the principal amount your new payment is calculated on.

Recast fee

Most lenders charge $100–$500 to recast. Some charge a flat fee; others charge a percentage of the recast amount. Call your lender for the exact fee before proceeding. Use this calculator to verify the break-even makes sense.

New monthly payment

Calculated on the new lower balance, original interest rate, and remaining term. The payment will be lower than your current payment.

Monthly and annual savings

The difference between your current and new payment, multiplied by months or years. This shows the true benefit of the recast.

Break-even timeline

Divide recast fee by monthly savings. If your recast fee is $250 and monthly savings is $100, break-even is 2.5 months. After that, every payment is pure savings.

Important recast limitations

Not all loans allow recasting

Conventional mortgages typically allow recasting. FHA loans may have restrictions. VA loans have limited recast options. Jumbo loans vary by lender. Always check with your lender before planning a recast.

Some lenders do not offer recast

Smaller lenders or loan servicers may not offer recast as a service. If you are working with a major bank (Chase, Bank of America, Wells Fargo), recasting is usually available. Contact your servicer directly to confirm availability and ask for their recast policy.

You cannot change your loan term

A recast recalculates your payment over the remaining time on your original term. If you have 25 years left, your new payment is calculated over 25 years. You cannot extend to 30 years or shorten to 20 years with a recast—only refinancing offers that option.

The interest rate stays the same

A recast does not lock in a new rate. Your current rate remains. If you want to take advantage of falling rates, you need to refinance, not recast.

Recast scenarios and examples

Scenario 1: $50,000 inheritance on a $400,000 mortgage

Starting point: $400,000 balance, 6.0% rate, 25 years remaining, $2,398 payment.

After recast: $350,000 balance, 6.0% rate, 25 years remaining, $2,099 payment.

Savings: $299/month or $3,588/year. Recast fee: $250. Break-even: Less than 1 month.

This is a compelling recast scenario. The $50,000 inheritance drops your payment by 12% at virtually no cost.

Scenario 2: $10,000 bonus on a $300,000 mortgage

Starting point: $300,000 balance, 5.5% rate, 20 years remaining, $1,795 payment.

After recast: $290,000 balance, 5.5% rate, 20 years remaining, $1,751 payment.

Savings: $44/month or $528/year. Recast fee: $250. Break-even: 5.7 months.

A smaller recast is still worthwhile if the break-even is under 12 months. After break-even, you pocket $528 every year for the remaining term.

Scenario 3: $5,000 lump sum on a high-balance jumbo mortgage

Starting point: $1,000,000 balance, 5.25% rate, 28 years remaining, $5,680 payment.

After recast: $995,000 balance, 5.25% rate, 28 years remaining, $5,655 payment.

Savings: $25/month or $300/year. Recast fee: $500. Break-even: 20 months.

For very large balances, even a $5,000 payment may not create a significant payment reduction. Use this calculator to check break-even before proceeding.

Should you recast or refinance?

Use this recast calculator to answer the question:

• Compare recast savings (from this calculator) against refinancing savings (from our Refinance Calculator).
• Include all costs: Recast fee + remaining interest on recasted balance vs. refinance closing costs + new interest rate.
• Consider timeline: If you plan to stay in the home 5+ more years, refinancing or recasting could make sense. If moving within 2 years, neither may be worth it.
• Check your rate: If your current rate is 4.5% or lower and rates have risen to 7%, stay put. If your rate is 7%+ and rates are 5%, refinancing could save more.

Bottom line

A mortgage recast is a low-cost way to reduce your monthly payment if you have a lump sum to apply to principal and your current interest rate is acceptable. Use this mortgage recast calculator to model your scenario, then contact your lender to confirm they allow recasting and to get an exact recast fee quote. If break-even is under 12 months, a recast is likely a smart move.

FAQ

Does a recast hurt my credit score?

No. A recast does not involve a credit inquiry, hard pull, or new application. It is simply a modification to your existing loan. Your credit score should not be affected. In fact, paying down principal is positive credit behavior.

Can I recast if I have PMI?

Yes, recasting can help you remove PMI faster. If you are close to 20% equity, a lump sum payment combined with a recast can accelerate PMI removal. Use our PMI Calculator to track your equity progress and recast opportunity.

How long does a recast take?

A recast is processed much faster than refinancing. Most lenders complete a recast in 3–10 business days. Refinancing typically takes 30–45 days. If you need payment relief quickly, recasting is faster.

Can I recast multiple times?

Yes. You can recast as often as you want (though recasting multiple times in a year would be unusual). Some borrowers recast once after an inheritance and never again. Others recast after each bonus or significant savings milestone. There is no limit—only the recast fees add up over time.

Is recasting better than making extra payments?

They are different strategies. Extra payments reduce your payoff date and total interest (without lowering your monthly payment). Recasting lowers your monthly payment (without changing your payoff date). If your goal is lower monthly cash flow, recast. If your goal is faster payoff, make extra payments. Many borrowers do both: they recast to free up monthly cash, then use that freed-up cash for extra payments on another loan or savings goal.

What is the typical cost of a mortgage recast?

Most lenders charge $100–$500 for a recast, with $250 being common. Some charge a flat fee; others charge a percentage of the recast amount (typically 0.5–1%). Always ask your lender for their exact recast fee before committing. Use this calculator to verify break-even makes sense at your lender's fee level.