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Mortgage Recast Calculator

Put a lump sum toward your mortgage and re-amortize the rest — see your new lower monthly payment, and the honest trade-off against just keeping your old payment.

Recast your mortgage

Enter your loan and the lump sum you'd put down. The calculator re-amortizes the reduced balance over your remaining term and compares it with keeping your current payment.

Mortgage balance

The recast payment is re-computed on the reduced balance.

APR %

Years left

Lump sum payment

Most servicers require at least $5,000 to recast.

Recast fee $

Try:

New monthly payment$1,766.95Saves $353.39/mo vs $2,120.34/mo · lifetime interest $280,084.4 (was $336,101.28) · keep paying $2,120.34 and finish 99 months early with $174,353.14 interest

Best for cash flow

Recast the loan

$1,766.95/mo

payment drops · 25y 0m term · balance $250,000 after lump sum

Total interest$280,084.4
Interest saved vs doing nothing$56,016.88
Cash out of pocket$50,250

Total interest over the life of the loan — lower is better

Best for total savings

Keep paying $2,120.34

same payment · done 99 months early

16y 9m paid off

Total interest$174,353.14
Interest saved vs doing nothing$161,748.14
Extra saved vs recasting$105,731.26

Total interest over the life of the loan — lower is better

How it works: your current payment comes from the amortization formula on your balance over the months left. The recast payment re-runs the same formula on the reduced balance (balance minus lump sum) over the same remaining term — the rate and term never change. Then the calculator simulates three paths month by month: do nothing, recast (lower payment), and keep paying the old amount on the reduced balance (same payment, shorter term).

How a mortgage recast works

A recast (also called re-amortization) is the lender's way of turning a lump-sum principal payment into a permanently lower monthly bill. You pay a chunk off the balance — typically at least $5,000 — and the servicer spreads the smaller remaining balance over the months left on your loan at the same interest rate. Nothing else changes: same rate, same payoff date, same loan. The fee is usually $150 to $500, a fraction of refinancing costs.

The formula

new payment = (balance − lump sum) × r ÷ (1 − (1 + r)^{−months left}) where r = APR ÷ 12 ÷ 100 · term and rate are unchanged

The math is the standard amortization formula, just run on the smaller balance. Because the term stays the same, a recast does not get you out of debt sooner — to finish early, you would keep paying the old amount after recasting, which the duel above models as the "keep payment" path.

Worked example

A $300,000 mortgage at 7% APR with 25 years left costs $2,120.34 a month. Make a $50,000 lump-sum payment (plus a $250 recast fee) and ask the servicer to recast: the balance drops to $250,000, re-amortized over the remaining 300 months. The new payment is $1,766.95 — a saving of $353.39 every month — and lifetime interest falls from $336,101.28 to $280,084.4. If instead you kept paying $2,120.34, the loan would end in 16 years and 9 months with only $174,353.14 of interest: cheaper overall, but the required bill never drops.

Where this comes in handy

Windfall planning: turn a bonus, inheritance, or home-sale proceeds into a permanently lower housing bill without refinancing.
Low-rate protection: if your rate is lower than today's market, a recast keeps it — refinancing would trade it away.
Pre-retirement budgeting: reduce the required payment before fixed-income years without draining savings to pay the loan off.
Rental cash flow: trim the payment on an investment property to improve monthly cash flow while keeping your leverage.

Mortgage recast — frequently asked questions

What exactly is a mortgage recast?

It is a lender service that takes a lump-sum principal payment, subtracts it from your balance, and re-amortizes the smaller balance over your remaining term at the same interest rate. Your monthly payment drops, but the rate, loan length, and payoff date stay exactly as they were. The industry name for it is re-amortization.

Will my monthly payment actually go down?

Yes — that is the whole point. Because the same rate and term now apply to a smaller balance, the required payment is recomputed lower. Unlike making extra payments on your own, a recast is the only way to reduce the scheduled payment without refinancing. The calculator shows your exact new amount.

Does recasting shorten my loan?

No. The term is unchanged — a 25-year loan with 25 years left is still a 25-year loan after the recast. If your goal is to finish sooner, keep paying the old amount after recasting: you get the lower required bill as a safety net and the early payoff as the plan. The duel above shows both paths side by side.

Should I recast or refinance?

Recast when you like your current rate and just want a lower payment: the fee is a few hundred dollars, there is no appraisal, and no new underwriting. Refinance when market rates have fallen meaningfully below yours, because only a refinance changes the rate. Rule of thumb: recast for the payment, refinance for the rate.

Can I recast an FHA or VA loan?

Usually not — most FHA and VA servicers do not offer recasting, and USDA loans are similar. Conventional conforming loans (the Fannie Mae and Freddie Mac kind) are the most recast-friendly. Confirm with your servicer in writing before you send the lump sum.

Is there a minimum lump sum?

Most servicers require at least $5,000, and the savings only become meaningful around $10,000 and up — below that, the payment change may not feel worth the fee. Try your number in the calculator: if the monthly saving is small, a plain extra principal payment may serve you better.

Does the recast fee come out of my lump sum?

Typically no. The fee — usually $150 to $500 — is charged separately, paid out of pocket or occasionally added to the loan balance. The full lump sum reduces your principal. This calculator treats the fee as separate cash out of pocket so the trade-off stays honest.

Is a recast better than just making extra payments?

It depends on the goal. Extra payments with no recast keep your payment the same, finish the loan sooner, and cost the least total interest — the calculator's "keep payment" card. A recast buys monthly breathing room instead. Many borrowers do both: recast for the lower required bill, then keep paying the old amount anyway.

How does this compare with the extra loan payment calculator?

That tool models arbitrary extra payments on any loan — great for planning what a lump sum does by itself. This page models the lender's re-amortization step that converts a lump sum into a lower required payment. Use the extra loan payment calculator to plan the lump sum, then this one to decide whether to recast. For the refinance side of the decision, the refinance break-even calculator shows when refinancing pays for itself.