Mortgage Recast Calculator
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Mortgage Recast Calculator

See exactly how much your monthly payment drops after a lump-sum principal payment, plus the interest you save, when you break even, and whether recasting beats refinancing.

Your mortgage

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months
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Lump-sum payment

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Everything calculates instantly in your browser. Nothing is sent anywhere.

Your new monthly payment
$0
Total with escrow: $0
Saved / month
$0
Interest saved
$0
Break-even
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Payment before and after

Before
$0
After recast
$0
You save $0 every month
Current P&I payment$0
New P&I payment$0
Monthly savings$0
Total interest (before)$0
Total interest (after recast)$0
Interest avoided$0
Effective yield on lump sum0%
Break-even (months)-
New balance after recast$0

Estimate only. Your actual new payment depends on your servicer's calculation method. Escrow is not affected by a recast. Interest savings assume no additional principal payments. This tool provides educational estimates, not financial advice.

New payment after recast
$0

The short answer

A mortgage recast means you make a lump-sum principal payment and your lender recalculates your monthly payment based on the lower balance, keeping the same rate and remaining term. Your payment drops, the loan stays the same otherwise, and it costs $150 to $500 versus thousands for a refinance. Most conventional (Fannie Mae and Freddie Mac) loans are eligible. FHA, VA, and USDA loans generally are not.

How it works

What actually happens when you recast a mortgage

When you took out your mortgage, your lender built an amortization schedule, a plan that spreads the principal and interest evenly across every month of the term. If you suddenly reduce the principal with a large payment, the math behind that schedule changes. The lender runs the amortization formula again with the new, lower balance and the same interest rate and remaining months, and the result is a smaller required monthly payment.

That is the entire transaction. Your rate does not change. Your payoff date does not change. No credit check, no appraisal, no title search. You are asking the lender to do a single arithmetic operation and update your billing. The fee, typically $150 to $500, covers the administrative cost of processing Fannie Mae Form 181, notating the change and sending you a new payment schedule.

The process usually takes 45 to 60 days from the time your servicer receives the lump sum and the fee. During that time you continue making your original payment. Once the recast is complete, the lower payment takes effect.

Eligibility

Which loans can be recast, and which cannot

Eligible: most conventional loans backed by Fannie Mae or Freddie Mac. Both agencies allow servicers to offer reamortization (the technical term) after a substantial principal curtailment. Jumbo and portfolio loans held by the originating lender are typically eligible too, under the lender's own rules.

Not eligible: FHA, VA, and USDA loans. Government servicing guidelines do not include reamortization provisions for these programs. If you have one of these loan types, refinancing is the path to a lower payment after a principal reduction.

Not every servicer offers recasting

Even on eligible conventional loans, some servicers do not allow it. Before you send a lump sum, call your loan servicer, the company you make payments to, and ask two questions: Do you allow mortgage recasting? and What is the minimum lump-sum payment required? Minimums range from $5,000 at some servicers to $25,000 at others. Most also require that your loan is current (no missed payments) and has been active for at least 12 months.

The big comparison

Recast vs. refinance: which one wins?

This is the question that brings most people to this page. The answer depends almost entirely on one thing: whether current rates are meaningfully lower than your existing rate.

RecastRefinance
Cost$150 to $500$3,000 to $10,000+
Credit checkNoYes
AppraisalNoUsually yes
Rate changeNo, keeps your rateYes, new rate
Term changeNo, same payoff dateOptional, can shorten or extend
Cash neededLump sum + feeClosing costs (can roll in)
Timeline45 to 60 days30 to 60 days
Best whenYou have a low rate and want a lower paymentCurrent rates are well below yours

If you locked in a 3 to 4% rate during 2020 to 2021 and current rates are above 6%, a recast is almost certainly the right move. You get the lower payment without giving up a rate that no longer exists. If rates have dropped significantly below your current rate, refinancing saves on both the rate and the payment, and the closing costs may pay for themselves quickly.

What to ask

Questions for your servicer before you recast

  • Do you allow mortgage recasting on my loan type?
  • What is the minimum lump-sum payment?
  • What is the processing fee?
  • How long does the process take?
  • Do I need to be current on payments? For how long?
  • Is there a seasoning requirement (minimum time the loan must have been open)?
  • Can I recast more than once?
  • Will my escrow payment change?

Questions answered

Mortgage recast FAQ

What is a mortgage recast?
A mortgage recast is when you make a lump-sum payment toward your principal and your lender recalculates your monthly payment based on the lower balance, keeping the same interest rate and remaining term. Your payment drops, but nothing else about the loan changes.
How much does a mortgage recast cost?
Most lenders charge a one-time processing fee between $150 and $500. There are no appraisal, title, or closing costs, making it dramatically cheaper than refinancing.
Which loans can be recast?
Most conventional loans backed by Fannie Mae or Freddie Mac are eligible. FHA, VA, and USDA loans generally cannot be recast. Jumbo and portfolio loans may be eligible depending on the lender.
Recast vs refinance: which is better?
If you already have a low interest rate and want a lower payment without closing costs or a credit check, recasting is usually better. Refinancing makes more sense when current rates are meaningfully lower than your existing rate.
What is the minimum lump sum for a recast?
It varies by servicer, typically $5,000 to $25,000 or 10% of the balance. Call your servicer before sending any money to confirm their minimum.
Does recasting change my interest rate?
No. Your rate stays exactly the same. That is one of the main advantages, you keep a favorable rate while lowering your payment.
Does recasting change my loan term?
No. Your payoff date stays the same. The lower payment is the result of spreading a smaller principal over the same remaining months.
How long does a recast take?
Usually 45 to 60 days from when your servicer receives the lump sum and the fee. You continue making your original payment until the recast is processed.
Can I recast an FHA or VA loan?
Generally no. FHA and VA servicing guidelines do not include reamortization provisions. Refinancing is the alternative for these loan types.
Can I recast more than once?
Some servicers allow multiple recasts. Others limit it to one per 12-month period. Ask your servicer about their policy.
Does recasting affect my credit?
No. A recast is not reported to credit bureaus as a new account or inquiry. Your credit score is unaffected.
Is a recast better than making extra payments?
Different goals. Making extra payments without recasting pays off the loan faster and saves more total interest, but your required monthly payment stays the same. Recasting lowers the required payment, which improves cash flow. If you want payment relief, recast. If you want to pay off faster, make extra payments.
Does the lump sum need to come from savings?
It can come from anywhere, savings, home sale proceeds, an inheritance, a bonus. Common scenarios include selling a previous home and applying the equity to a new mortgage, or receiving an inheritance.
Does escrow change after a recast?
Not because of the recast itself. Escrow is based on property taxes and insurance, which are independent of your principal balance. Escrow can change at your annual escrow analysis for other reasons.
Will recasting help me remove PMI?
The recast itself does not remove PMI, but the lump-sum payment reduces your loan-to-value ratio. If it drops below 80%, you may be able to request PMI cancellation separately, a valuable side benefit worth checking.

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