The one-sentence difference
Extra principal payments keep your monthly payment the same and shorten the loan. You finish paying it off sooner. A mortgage recast keeps the same payoff date and lowers your required monthly payment by re-amortizing a smaller balance over the remaining term. Same goal of attacking principal, opposite effect on your monthly cash flow and your finish line.
Recast vs extra payments: side by side
| Factor | Mortgage recast | Extra principal payments |
|---|---|---|
| Monthly payment | Lowered | Unchanged |
| Loan term / payoff date | Same payoff date | Shortened, paid off sooner |
| Interest rate | Unchanged | Unchanged |
| Total interest saved | From the lower balance only | Usually more: fewer payments overall |
| How you pay | One qualifying lump sum + recast | Any amount, any time, ongoing or one-time |
| Cost / fee | One-time fee of $150–$500 | No fee |
| Formal request needed | Yes: you must request a re-amortization | No: just send extra toward principal |
| Best for | Lower monthly cash outflow now | Paying off the mortgage faster |
Why extra payments alone don't lower your payment
This is the part that trips people up. When you send extra money toward principal, your balance drops, but your lender does not recalculate your monthly payment. You keep paying the original amount, just for fewer months. The only way to convert a lower balance into a lower required payment is to ask the lender to recast (re-amortize) the loan. That formal step, plus the small fee, is what separates a recast from simply paying ahead.
Which should you choose?
Choose extra principal payments if your priority is becoming debt-free sooner and saving the most total interest — and you can comfortably keep making the current payment. Choose a recast if you want to reduce your monthly obligation — for example, to ease cash flow, qualify for something else, or simply breathe easier — while keeping your rate and original timeline. Some borrowers combine both: make extra payments for years, then recast a windfall to lock in a lower payment.
See the recast side in numbers
The calculator below shows what a lump sum plus a recast does to your monthly payment and total interest. If your goal is the opposite — a shorter term — picture keeping that payment the same and watching the payoff date move closer instead.