MortgageMath

Mortgage Recast Calculator

By MortgageMath Editorial Team Last reviewed Methodology

A mortgage recast calculator shows how a lump-sum principal payment lowers your monthly mortgage payment without refinancing. Enter your current balance, lump sum, and remaining term to see your new payment and total interest savings.

New Monthly Payment

$1,749/mo

down from $2,099/mo — saves $350/mo

Current monthly payment$2,099/mo
New balance after lump sum$250,000
New monthly payment$1,749/mo
Monthly savings$350/mo

Monthly Savings

$350/mo

Interest Saved

$54,967

Break-Even

12 yr

Term Stays Same

25 yr

How recasting works: After paying $50,000 toward principal, your lender re-amortizes the remaining $250,000 balance over the same 25 yr term — lowering your payment by $350/mo.

What is mortgage recasting?

Mortgage recasting — also called mortgage re-amortization — is the process of making a large lump-sum payment toward your principal and having your lender recalculate your monthly payment over the original remaining term. The result is a lower monthly payment with the same interest rate and the same payoff date. Your lender essentially recalculates what your payment would be from the start if you had originally borrowed the lower amount.

Recasting is not widely advertised by lenders — they make less money if you owe less — but it is available on most conventional conforming loans. Government-backed loans (FHA, VA, USDA) typically cannot be recast.

The primary benefit is cash flow. If you receive a large sum — from selling a previous home, an inheritance, a stock vest, or a year-end bonus — and you want to free up monthly income without going through the complexity and cost of refinancing, recasting is the simplest solution.

Recast vs. refinance vs. extra payments

Each approach to deploying a large sum toward your mortgage has distinct tradeoffs:

Approach Monthly Payment Loan Term Rate Cost
Recast Goes down Same Same $150–$500 fee
Refinance May go down Resets Changes $3,000–$6,000+
Extra payment only Same Shortens Same $0

Recasting is most valuable when you have a low existing rate that you do not want to lose through refinancing, but you want immediate payment relief from a large lump sum. Extra payments save more total interest (because the term shortens) but do not lower the monthly obligation.

Recast examples

Example 1: $300,000 balance, $50,000 lump sum, 25 years remaining

Metric Before Recast After Recast
Loan balance $300,000 $250,000
Monthly P&I $2,103/mo $1,752/mo
Monthly savings — $351/mo
Remaining term 25 yr 25 yr (unchanged)
Total interest (remaining) $330,900 $275,600
Interest saved — $55,300

Rate: 6.89%. A $50,000 lump sum (plus ~$250 recast fee) lowers the monthly payment by $351 — freeing up $4,212 per year in cash flow — while also saving $55,300 in interest over the remaining term.

Example 2: New home purchase — applying sale proceeds

A common recast scenario: you buy a new home while your previous home is still selling. You take out the full mortgage, then when the previous home closes, you apply the net proceeds — say $80,000 — to the new mortgage principal and request a recast. This avoids the complexity of a bridge loan while immediately reducing your payment to reflect the lower balance.

Tip: Some lenders have a waiting period (30–90 days after origination) before they will process a recast. Ask your lender about their specific timing requirements before planning a post-closing recast.

How to request a mortgage recast

The recast process is straightforward:

  1. Contact your loan servicer. Call or write to ask whether your loan is eligible for recasting. Confirm the minimum lump sum, fee, and processing time.
  2. Make the lump-sum principal payment. Send the payment with clear notation that it is to be applied to principal, not future payments.
  3. Submit the formal recast request. Your servicer will provide a form to sign. Pay the recast fee (typically $150–$500) at this time.
  4. Continue making regular payments. The new, lower payment typically takes effect on the next billing cycle after processing (30–60 days).

Frequently Asked Questions

What is mortgage recasting?
Mortgage recasting (also called re-amortization) is the process of making a large lump-sum payment toward your principal balance and having your lender re-calculate (re-amortize) your remaining monthly payment over the original remaining term. Unlike extra payments, which keep your payment the same but shorten the term, recasting keeps the term the same but lowers your payment. The result: more cash flow each month.
What is the difference between recasting and refinancing?
Recasting and refinancing both involve your existing loan, but they work very differently. Recasting applies a lump sum to principal and re-amortizes — no new loan, no credit check, no appraisal, and a small fee ($150–$500). Your rate and term stay the same. Refinancing creates an entirely new loan with potentially a new rate, term, lender, and all the associated closing costs ($3,000–$6,000). Recast is faster, cheaper, and simpler — but only lowers your payment without changing your rate.
How much do I need to put down to recast?
Lender minimum requirements vary, but most conventional lenders require a lump-sum payment of at least $5,000–$10,000 to initiate a recast. Some lenders have higher minimums (e.g., $25,000). There is no universal standard — contact your servicer directly to ask about their specific recast requirements, fees, and how to submit the request.
Do all mortgage types allow recasting?
No. Recasting is most commonly available for conventional conforming loans. Most FHA and VA loans cannot be recast — the government-backed program rules do not typically allow it. USDA loans also generally cannot be recast. If you have a government-backed loan and want a lower payment, refinancing is usually the alternative. Always verify with your specific servicer.
When does recasting make the most sense?
Recasting makes the most financial sense when: (1) you receive a large lump sum (inheritance, home sale proceeds, bonus, stock sale) and want to lower your monthly obligation; (2) you have a low existing interest rate and refinancing would increase it; (3) you just sold a home and are buying a new one — you can apply the net proceeds to the new loan and recast to lower the payment; (4) you want reduced cash flow commitments without sacrificing your attractive rate.
Does recasting save as much interest as extra payments?
Recasting saves some interest — the lump sum reduces the balance on which all future interest accrues. However, extra payments that shorten the term save more total interest because you eliminate payments at the end of the loan, which are entirely interest-heavy. Recasting redistributes the savings over the original term rather than eliminating the back-end payments. If maximizing total interest savings is the goal, extra monthly payments or a lump sum without recasting (applied to principal only) saves more.
What happens if I recast and then sell in a few years?
Recasting is especially attractive for short-term holders. The monthly savings start immediately after the recast is processed (usually 30–60 days). If you sell in 5 years, you benefit from 60 months of lower payments — without needing to stay for the full break-even period that a refinance would require. The upfront cost is also much lower (a $250 recast fee vs. $6,000 in refinance closing costs).
How long does a recast take to process?
Most lenders process a recast request within 30–60 days of receiving the lump-sum payment and signed recast request form. The lump sum is applied to principal immediately, but the new payment amount typically takes effect on the next billing cycle after the recast is officially processed. During this period, make your regular monthly payment as scheduled.
Is there a tax impact from recasting my mortgage?
Recasting itself has no direct tax impact — it is simply a restructuring of your existing loan. However, because a recast lowers your monthly interest payment (by reducing the balance), your annual mortgage interest deduction (if you itemize) will also decrease proportionally. This is generally a minor tax consideration compared to the cash flow and interest savings benefits of recasting.
Can I recast a Fannie Mae or Freddie Mac loan?
Yes — both Fannie Mae and Freddie Mac allow their conventional conforming loans to be recast, subject to lender approval. The loan servicer must agree to process the recast, and they may charge a fee. Conforming loans (those within the $766,550 loan limit for 2026) backed by Fannie or Freddie are the most commonly eligible for recasting. Jumbo loans may also allow recasting at the lender's discretion.

Related Calculators

Mortgage Payoff Calculator
Compare recasting (lower payment, same term) vs. extra payments (same payment, shorter term).
Bi-Weekly Mortgage Calculator
Another strategy to reduce total interest — compare with the recast approach.
Mortgage Points Calculator
If you want a lower rate instead of a lower balance, compare buying points vs. recasting.
HELOC Payment Calculator
If you are considering using HELOC proceeds to fund a recast, model your HELOC payments first.

Sources & Methodology

This calculator is for informational purposes only and does not constitute financial advice. Recast eligibility and fees vary by lender and loan type. Government-backed loans (FHA, VA, USDA) are generally not eligible. Consult your loan servicer before initiating a recast.