How to Recast Your Mortgage: A Step-by-Step Guide (2026)

A mortgage recast is one of the simplest ways to lower your monthly payment without touching your interest rate. You make a large lump-sum payment toward your principal, your lender re-amortizes the remaining balance over your existing term, and your payment drops. No refinance, no credit check, no closing costs. Just a one-time fee, usually between $150 and $500.

Here’s exactly how to do it, step by step.

Step 1: Confirm your loan is eligible

Not every loan can be recast. Conventional loans backed by Fannie Mae or Freddie Mac almost always qualify, and many jumbo loans do too. Government-backed loans (FHA, VA, and USDA) generally cannot be recast. If you have one of those, your main alternative is refinancing or simply making extra principal payments.

Call your loan servicer (the company you send payments to, not necessarily your original lender) and ask two questions: “Do you allow recasting on my loan?” and “What is the minimum lump sum?” You can also check our lender recast policies page for minimums and fees by servicer.

Step 2: Check the minimum lump sum

Lenders set their own threshold for how much extra principal you must pay to trigger a recast. The most common minimums are $5,000 to $10,000. Some lenders require a specific dollar amount; others require a percentage of the balance. Confirm this before you move money around, because falling short means your extra payment just sits as a principal reduction without lowering your required monthly payment.

Step 3: Run the numbers first

Before committing the cash, see what the recast actually buys you. Use our mortgage recast calculator to enter your current balance, rate, remaining term, and the lump sum you’re considering. You’ll see:

• Your new monthly payment and how much lower it is
• Total interest saved over the life of the loan
• The break-even point: how quickly the recast fee pays for itself

This step matters because the savings depend heavily on your rate and how much time is left on the loan. A recast early in a 30-year mortgage saves far more interest than one made with five years left.

Step 4: Request the recast in writing

Once you’re confident, contact your servicer and formally request a recast (some call it “re-amortization”). They’ll typically send a form or set up the request through your online account. You’ll agree to the one-time fee and specify the lump-sum amount.

Step 5: Make the lump-sum payment

Pay the lump sum toward principal as directed by your servicer. This is critical: clearly mark the payment as principal-only or follow the servicer’s exact instructions, otherwise it may be applied to future scheduled payments instead of reducing your balance.

Step 6: Wait for re-amortization

The servicer recalculates your payment based on the new, lower balance, keeping your original interest rate and original payoff date. This process usually takes 30 to 45 days. You’ll receive a new amortization schedule and a confirmation of your reduced monthly payment.

Step 7: Verify your new payment

When the recast is finalized, double-check your next statement. Confirm the new monthly amount, the unchanged interest rate, and the same maturity date. If you have automatic payments set up, update the amount so you’re not overpaying.

A quick recap

Step	What happens
1	Confirm loan type is eligible (not FHA/VA/USDA)
2	Check the minimum lump sum ($5k–$10k typical)
3	Model the savings with the calculator
4	Request the recast in writing
5	Pay the lump sum as principal
6	Servicer re-amortizes (30–45 days)
7	Verify the new, lower payment

Is it worth the effort?

For most people sitting on a low fixed rate who’ve come into a chunk of cash, recasting is a clean win: a lower payment with no rate risk and minimal cost. If you’d rather pay the loan off faster instead of lowering the payment, compare your options on our recast vs extra payments guide, or read whether recasting is worth it for your situation.

When you’re ready, run your numbers in the calculator. It takes about a minute and tells you exactly what a recast would do for your payment.