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Recast vs refinance, side by side
On the default — $400,000 at 7.00% with 25 years left, a $50,000 lump sum, and a 6.25% refinance offer: the recast drops the payment to $2,473.73 and wins. Enter your own numbers below.
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Recast vs Refinance Calculator
Both lower your mortgage payment — but a recast keeps your loan and a refinance replaces it. Enter your balance, your rate, the refinance offer on the table, and the lump sum you could put down. This calculator runs both options side by side: new payment, interest saved, fees, and the winner.
What each option actually does
A recast (re-amortization) keeps your existing mortgage — same rate, same payoff date — and only re-cuts the required payment after you hand the lender a lump sum. Cost: a one-time fee of $150–$500, no appraisal, no title work, no credit check. A refinance pays off your mortgage with a brand-new loan: new rate, new term, closing costs of 2–5%, full underwriting. The calculator above compares them apples-to-apples on the same remaining term: current payment, recast payment, refinance payment, the interest each one saves, and the fees each one costs. The winner is the bigger net number — savings minus fees — not the lower payment alone.
Output · formula · meaning
| Output | Formula | What it means |
|---|---|---|
| Recast payment | re-amortize (balance − lump) at current rate, same term | $400,000 → $350,000 at 7%, 25 yrs = $2,473.73 (−$353.39/mo). |
| Refinance payment | re-amortize full balance at new rate, same term | $400,000 at 6.25%, 25 yrs = $2,638.68 (−$188.44/mo). |
| Recast interest saved | remaining interest now − remaining interest after − fee | $55,767 net after the $250 fee on the default. |
| Refinance interest saved | remaining interest now − remaining interest at new rate − closing | $50,532 net after $6,000 in closing costs. |
| Refinance breakeven | closing costs ÷ monthly savings | $6,000 ÷ $188.44 = 2.7 years — selling sooner means the refinance loses. |
Scenario A: a rate worth keeping — recast wins
$500,000 owed at 3.25%, 25 years left. A $60,000 windfall lands and a lender quotes 6.25% with $8,000 in closing costs. Current payment: $2,436.58. Recast: the balance falls to $440,000 and the payment drops to $2,144.19 (−$292.39/mo), saving $27,467 in interest net of the $250 fee. Refinance: the payment rises to $3,298.35 (+ $861.77/mo) and nets −$266,530 — you would pay thousands to lose your rate. This is the classic recast case: a rate below today’s market is an asset; the recast keeps it.
Scenario B: a rate worth replacing — refinance wins
$400,000 owed at 8.00%, 27 years left. Same $50,000 lump sum, $250 fee; the refinance quote is 6.00% with $7,000 in closing. Current payment: $3,017.12. Recast: $2,639.98 (−$377.14/mo), net $71,943 saved. Refinance: $2,495.94 (−$521.18/mo), net $161,862 saved — more than double the recast, with a breakeven of just over a year. When the new rate undercuts your rate by enough to cover closing costs, refinancing wins and it is not close.
The one-line rule of thumb
If your rate beats today’s market, recast: you keep the better rate and buy a lower payment for a few hundred dollars. If today’s market beats your rate by enough that the interest savings clear the closing costs before you sell, refinance. When neither is true — the market is flat and you have no lump sum — the honest answer is do nothing; the calculator says so too.
What a recast cannot do
A recast cannot change your interest rate, shorten your term, pull cash out, or drop PMI by itself — those all need a refinance. Most FHA, VA, and USDA loans cannot be recast at all (conventional Fannie/Freddie loans usually can; confirm with your servicer). Lenders set minimum lump sums, typically $5,000–$25,000. And the lump sum is gone — do not empty your emergency fund to buy a smaller payment; keep 3–6 months of expenses liquid first.
Who uses this
- Homeowners with low legacy rates: keeping a 3% rate while buying a lower payment — the recast sweet spot.
- Windfall recipients: a bonus, inheritance, or home-sale proceeds becomes a permanently smaller monthly bill.
- Rate shoppers: checking whether a refinance quote actually beats a cheap recast before signing.
- Retirees & downsizers: lowering the required payment without restarting the loan clock.
Accuracy & limitations
Payments are standard fixed-rate amortization (P&I only — taxes, insurance, and PMI are unchanged by either option and are excluded from both sides). The refinance is compared on your same remaining term; extending the term would lower the payment but is a different decision — see the refinance break-even calculator for term-change analysis. All math is exact double-precision; displays round to whole dollars. Real servicer rules (minimums, eligibility) vary — confirm before acting.
Want the recast alone in detail? The mortgage recast calculator shows the re-amortization schedule. Refinancing instead? The refinance break-even calculator finds your exact payoff month, and the extra payment calculator compares the third option: just paying more every month.
Cite this calculatorBright Side Kit. “Recast vs Refinance Calculator.” brightoolbox.com, 2026.
Bright Side Kit. "Recast vs Refinance Calculator." https://brightoolbox.com/recast-vs-refinance-calculator/ Accessed October 22, 2026.Frequently asked questions
What is a mortgage recast?
A lump-sum principal payment followed by re-amortization: your lender recalculates your required payment on the smaller balance, keeping your rate and payoff date. Typical fee: $150–$500. No appraisal, no title work, no credit check.
How much does a recast cost?
One flat fee — usually $150 to $500, set by your servicer. Compare that with 2–5% of the loan in refinance closing costs: on a $400,000 loan, that is $250 versus $8,000–$20,000.
Which loans can be recast?
Most conventional loans backed by Fannie Mae or Freddie Mac. FHA, VA, and USDA loans generally cannot — refinancing is the alternative there. Confirm with your servicer before counting on it.
When does a recast beat a refinance?
When your current rate is below today’s market rate and you have a lump sum: the recast keeps the better rate and buys a lower payment for a few hundred dollars, while refinancing would raise your rate.
When does refinancing beat a recast?
When today’s rate is meaningfully below yours — enough that the interest savings clear the closing costs before you sell — or when you need something a recast cannot do: a new rate type, a shorter term, cash out, or dropping PMI.
Does a recast change my interest rate or payoff date?
Neither. Your rate and your payoff date stay exactly the same; only the required payment drops. That is the whole point — and the limit.
Can I do both — recast and refinance?
Yes, in sequence: recast after a windfall to drop the payment, then refinance later if rates fall further. Each step is judged on its own math in the calculator above.
Recast vs extra monthly payments — which saves more?
Extra payments cut interest without lowering your required payment or changing your obligation; a recast lowers the required payment but costs the lump sum’s liquidity. The extra payment calculator runs that comparison.