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Mortgage Recast Calculator
A recast re-amortizes your existing loan over the same remaining term at the same rate — no new loan, no closing costs. Enter your current balance, rate, remaining term and the lump sum you plan to pay down to see the new payment.
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How a mortgage recast works
- What a recast does: you make a large lump-sum payment toward your principal, then ask your lender to re-amortize the remaining balance over the same remaining term at the same interest rate. The result is a lower monthly payment — not a shorter loan term.
- What it does not do: a recast does not change your rate, shorten your term, or remove PMI (LTV recalculation for PMI cancellation is a separate servicer request). It also does not reset your amortization schedule the way a refinance does.
- New monthly payment formula: P × r / (1 − (1+r)⁻ⁿ), where P is the new lower balance, r is the monthly rate (annual ÷ 12), and n is the remaining months.
- Break-even: you recover the lump sum through monthly savings in break-even = lump sum ÷ monthly savings months. After that point, every month is pure savings.
- Net interest saved = (monthly payment reduction × remaining months) − lump sum. This is positive as long as your savings over the remaining term exceed what you put in.
Worked example
Remaining balance: $320,000 at 6.5% with 25 years left. Monthly payment: $2,154. You pay down $50,000, new balance: $270,000. New payment: $1,817. Monthly savings: $337. Break-even: $50,000 ÷ $337 = 148 months (about 12 years). Net interest saved over 25 years: $337 × 300 − $50,000 = $51,100. The recast makes financial sense if you plan to keep the loan more than 12 years.
Frequently asked questions
Do all lenders offer mortgage recasts?
Most conventional loan servicers (Fannie/Freddie loans) offer recasts, but FHA, VA and USDA loans generally do not allow them. Jumbo lenders vary. Call your servicer and ask specifically for a "loan recast" or "re-amortization." The minimum lump sum and fee ($150–$500 is typical) vary by servicer.
Should I recast or make extra payments?
Extra payments reduce your balance and shorten the loan term, saving more interest overall. A recast reduces your monthly cash obligation without shortening the term — better if you want a lower required payment (e.g. to improve cash flow or qualify for another loan). If you want to pay off the loan faster, extra payments win. If you want a lower required payment, recast wins.
Is a recast better than refinancing?
A recast keeps your existing rate and has a small one-time fee ($150–$500). A refinance costs 2–5% of the new loan amount but lets you change the rate, term and loan type. If your current rate is already competitive, a recast is almost always cheaper. If rates have dropped significantly since you originated, refinancing may save more despite the cost.
Does a recast affect my credit score?
No. A recast is a modification of an existing loan, not a new credit inquiry or a new account. Your servicer does not pull your credit, and the recast does not appear as a new account or affect your utilization or history.
Formulas last reviewed . Results are estimates for educational use; not financial advice. Methodology →