Mortgage Recast Calculator

Find your new monthly payment after making a large lump-sum principal payment and having your lender re-amortize the remaining balance — without changing your rate or term.

New monthly payment

$1,461

Down from $1,753.77 per month

Monthly savings

$292

Detailed results
Total interest saved	$37,689
Total interest without recast	$226,131
Total interest after recast	$188,443
Lump sum applied	$50,000

What this result means

After applying the $50,000 lump sum, your new balance of $250,000 is re-amortized at 5% over the same 300 months (25.0 years) remaining on your loan. Your payment drops to $1461.48 — a saving of $292 every month. Over the remaining term you avoid $37,689 in interest charges. Your rate and payoff date are unchanged; only the payment shrinks.

Month-by-Month Payment Comparison (First 60 Months)

Side-by-side view of old vs. new payments and balances for the first 60 months after the recast. Shows how quickly the lower payment compounds into balance savings.

Month-by-Month Payment Comparison (First 60 Months). 60 rows, first 12 shown.
Month	Old Payment	New Payment	Old Balance	New Balance	Monthly Savings
1	$1,754	$1,461	$299,496	$249,580	$292
2	$1,754	$1,461	$298,990	$249,159	$292
3	$1,754	$1,461	$298,482	$248,735	$292
4	$1,754	$1,461	$297,972	$248,310	$292
5	$1,754	$1,461	$297,460	$247,883	$292
6	$1,754	$1,461	$296,946	$247,455	$292
7	$1,754	$1,461	$296,429	$247,024	$292
8	$1,754	$1,461	$295,911	$246,592	$292
9	$1,754	$1,461	$295,390	$246,158	$292
10	$1,754	$1,461	$294,867	$245,722	$292
11	$1,754	$1,461	$294,342	$245,285	$292
12	$1,754	$1,461	$293,814	$244,845	$292

How this is calculated

r = annualRate / 12 / 100
old_payment = balance × r × (1+r)^n / ((1+r)^n − 1)
new_balance = balance − lump_sum
new_payment = new_balance × r × (1+r)^n / ((1+r)^n − 1)   [same n, same r]
monthly_savings = old_payment − new_payment
total_interest_old = old_payment × n − balance
total_interest_new = new_payment × n − new_balance
interest_saved = total_interest_old − total_interest_new

What is a mortgage recast?

A mortgage recast — also called re-amortization — is a feature that lets you make a large, one-time payment toward your principal and then have your lender recalculate your monthly payment based on the lower balance. The interest rate stays exactly the same. The remaining term stays exactly the same. Only the payment shrinks.

That makes a recast structurally different from a refinance in almost every respect.

Recast vs. refinance — the key differences

When you refinance, you take out an entirely new loan. That means a new interest rate, a new term, a fresh credit pull, an appraisal, title work, and closing costs that typically run 2–5% of the loan amount. If rates have dropped significantly since you closed, a refinance can be powerful. But it comes with cost, paperwork, and the clock resets — early payments on the new loan go overwhelmingly to interest again.

A recast is far simpler. You make a lump-sum principal payment — most lenders require at least $5,000 to $10,000 — pay a processing fee that is usually $150 to $500, and the lender re-runs the amortization math. Your statement shows a lower required payment starting with the next billing cycle. No appraisal, no credit check, no title insurance, no closing table.

The tradeoff: a recast only helps you if your goal is a lower monthly payment. If your goal is a lower rate or a shorter term, you need a refinance.

When a recast makes sense

Recasting is well-suited to a few common situations. Buyers who sold a previous home and received sale proceeds after closing their new purchase often use the equity to fund a recast. Similarly, borrowers who receive a large bonus, inheritance, or equity compensation payout can put the windfall to work immediately without the friction of refinancing.

Because the rate and term do not change, a recast is also appropriate when your current rate is already competitive. You are not trying to improve the deal — you are trying to reduce what you owe and lower the required payment, while keeping everything else in place.

What a recast does not do

A recast does not shorten your loan term. Your payoff date remains exactly as scheduled. If you want to pay the loan off sooner, you can continue making your original (higher) payment after the recast — the excess above the new required payment will pay down principal even faster. But that discipline is entirely up to you; the loan itself is still written for the original term.

A recast also does not help you if your mortgage is a government-backed loan. FHA, VA, and USDA loans generally do not permit recasting. Most conventional conforming loans serviced by the large banks and servicers do allow it, but you should confirm with your servicer before planning around the feature.

The interest savings math

Because both the old and new loans share the same rate and the same remaining term, the interest saved is straightforward: you simply avoid financing the lump-sum amount for the rest of the term. The larger the lump sum, the further down the amortization curve you skip, and the more of each future payment goes to principal rather than interest. Over a 25-year remaining term, even a modest rate like 5% compounds into tens of thousands of dollars of interest on a $50,000 principal reduction.

How to read the results

The primary output is your new monthly payment. The monthly savings figure tells you how much cash flow you recover each month going forward. Total interest saved is the lifetime benefit — the cumulative interest you avoid by carrying a smaller balance for the rest of the term. The balance trajectory chart shows both loans declining in parallel, with the recast loan consistently lower throughout.

Assumptions

The loan is a fixed-rate mortgage — adjustable-rate mortgages use different amortization logic.
Monthly payments cover principal and interest only. Property taxes, homeowners insurance, HOA dues, and mortgage insurance are excluded.
The lender agrees to perform the recast and applies the lump sum entirely to principal at the start of a payment period.
No other extra payments are made before or after the recast beyond what is shown.
The interest rate and remaining term do not change as a result of the recast.
Total interest figures assume every scheduled payment is made on time for the full remaining term.
The recast fee is not included in the interest savings calculation, as it is typically negligible.
FHA, VA, and USDA loans are not modeled — those programs generally prohibit recasting.

Frequently asked questions

›Is a recast the same as refinancing?

No. A recast keeps your existing loan, rate, and remaining term intact — only the monthly payment is recalculated to reflect the reduced principal. A refinance replaces your loan entirely with a new one at a new rate and term, and typically costs 2–5% of the loan amount in closing costs. A recast is faster, cheaper, and far simpler, but it cannot lower your interest rate.

›Which lenders allow recasting?

Most conventional loans held by large banks and mortgage servicers permit recasting, but it is not a universal right — you must request it and the servicer must agree. FHA, VA, and USDA loans generally do not allow recasting. Jumbo loans often do. Always confirm with your servicer before planning a large principal payment around a recast.

›What is the typical fee for a mortgage recast?

Most lenders charge a flat administrative fee of $150 to $500 for processing a recast. Some charge nothing. This is dramatically lower than refinance closing costs, which typically run $3,000 to $10,000 or more depending on loan size and location.

›Is there a minimum lump-sum required?

Yes. Most servicers require a minimum principal curtailment — typically $5,000 to $10,000 — before they will agree to re-amortize the loan. Some impose a percentage-of-balance minimum instead. Check with your servicer for the exact threshold.

›Does a recast affect my interest rate or payoff date?

Neither. Your interest rate is set in the original loan contract and cannot be changed by a recast. Your payoff date also stays the same — the term is unchanged. Only the required monthly payment goes down. If you want to pay off the loan sooner, you can voluntarily continue paying the original higher amount; the surplus reduces principal faster.

›How does a recast differ from just making an extra principal payment?

An extra principal payment reduces your balance and total interest paid, but your required monthly payment remains unchanged. A recast goes one step further: after the lump-sum is applied, the lender recalculates the required payment over the remaining term so you are legally obligated to pay less each month. You get permanent cash-flow relief, not just a shorter payoff timeline.

›Can I recast an FHA or VA loan?

Generally no. Government-backed loans — FHA, VA, and USDA — do not offer recasting as a standard feature. If your loan is conventional (Fannie Mae or Freddie Mac conforming, or a jumbo loan), recasting is much more likely to be available.

›Is the money used for a recast tax-deductible?

The lump-sum principal payment itself is not deductible — it is a return of borrowed funds, not an interest expense. The reduced interest you pay going forward may be deductible if you itemize and meet the mortgage interest deduction rules, but the lump sum reduces your future deductible interest. Consult a tax professional for guidance specific to your situation.