What is a mortgage recast?
A mortgage recast (also called re-amortization) lets you make a large lump-sum payment toward your loan principal, after which your lender recalculates your monthly payment over the remaining term at the same interest rate. Your payment drops, your rate stays put, and your payoff date doesn't change. The only cost is a one-time fee, usually between $150 and $500.
That makes recasting fundamentally different from refinancing. A refinance replaces your loan entirely: new rate, new term, a credit check, and 2–6% of the balance in closing costs. A recast keeps everything about your existing loan except the balance and the payment. If you're sitting on a low fixed rate you don't want to give up, recasting is often the smarter move.
How the mortgage recast calculator works
Enter your current balance, interest rate, and remaining term, then add the lump sum you plan to put toward principal. The calculator subtracts your lump sum from the balance and re-amortizes the remaining amount over the same term and rate. You instantly see:
- Your new monthly payment and how much lower it is
- The total interest saved over the life of the loan
- Your break-even point: how fast the recast fee pays for itself
- A full before-and-after amortization schedule
- A plain-English verdict on whether it's worth it
Who should consider recasting?
Recasting tends to make sense when three things are true: you have a low fixed rate worth keeping, you've come into a chunk of cash (an inheritance, a bonus, or proceeds from selling another property) and you'd rather lower your required monthly payment than pay the loan off faster. If your priority is shortening the loan instead, extra principal payments without a recast may serve you better, because they keep your payment high and cut years off the term.
Recasting vs. refinancing vs. investing
Before you commit, it's worth comparing your options side by side. If current market rates are well below your existing rate, refinancing might save more despite the closing costs. Our recast vs. refinance tool runs both. And if you're wondering whether the lump sum would do more in the market, the recast vs. invest calculator weighs the guaranteed return of recasting against expected investment growth. Recasting gives a guaranteed, tax-free return equal to your mortgage rate, a high bar when rates are elevated.
What recasting costs and which loans qualify
Most conventional loans backed by Fannie Mae or Freddie Mac can be recast, and many jumbo loans can too. Government-backed loans (FHA, VA, and USDA) generally cannot. Lenders set their own minimum lump sum, commonly $5,000 to $10,000, and the one-time fee usually lands between $150 and $500. The process takes about 30 to 45 days and involves no credit check, so it won't affect your credit score. Always confirm the exact terms with your loan servicer — see our lender recast policies for minimums and fees by servicer.