How to use the mortgage recast calculator
- Enter your current mortgage balance, interest rate and the time left on the loan. Add your exact monthly principal and interest under More options if you want the time left worked out from it.
- Enter the lump sum you plan to pay and the recast fee, if your lender charges one.
- Optional: enter your lender's minimum lump sum. The page flags the result if your payment is below it.
- Read the payment after the recast, the monthly reduction and the interest saved. The table compares three choices: no lump sum, recast, or keeping your payment.
- Download the CSV or PDF to see the balances for each choice month by month.
Formula
Balance after the lump sum = balance - lump sum
Payment after recast = B x r / (1 - (1 + r)^-n), with B the new balance, r = APR / 12 and n the payments left
Monthly reduction = current payment - payment after recast
Interest is totaled by running each option month by month, rounded to the cent
Interest saved by recasting, after the fee = interest with no lump sum - interest after recast - fee
A recast keeps your rate and your end date. Only the payment changes. If you keep your old payment instead, the loan ends earlier and interest falls by more, but your required payment does not drop.
Worked example
The setup: you owe $320,000 at 6.5% with 27 years (324 payments) left. Your payment is $2,097.78. You pay a $60,000 lump sum, which leaves $260,000.
Recast: the payment becomes $1,704.44, which is $393.34 less, an 18.75% reduction. The end date does not change. Interest left falls from $359,676.89 to $292,241.20, so the recast saves $67,435.69, or $67,185.69 after a $250 fee.
Keep your payment instead: paying $2,097.78 on the $260,000 balance ends the loan after 206 payments (17 years 2 months), which is 118 payments sooner. Interest left is $172,112.90, which saves $187,563.99.
Comparing the two: both use the same $60,000. Recasting trades about $120,000 of extra interest savings for $393.34 of monthly cash flow. That is the real decision: a lower payment now or a shorter loan.
What a mortgage recast does
A recast, sometimes called re-amortization, is when you make a large lump sum payment toward principal and your servicer recalculates the monthly payment on the smaller balance. The interest rate and the remaining term stay the same, so the loan still ends on the original date. Because nothing about the loan is replaced, a recast generally does not involve a new application, an appraisal or a full set of closing costs, although a lender may charge a fee and set a minimum lump sum.
Not every lender or loan type allows a recast, and the rules vary. Ask your servicer whether it offers one, what the fee is and what the smallest lump sum can be.
Recast versus refinance
A refinance replaces your loan with a new one, which lets you change the rate and the term, but it comes with new closing costs. A recast keeps your current rate, which matters when your rate is lower than the rates now offered to you. Use the refinance calculator when you want to compare a new rate, and the recast calculator when the lump sum is the main event.
Lower payment or shorter loan
The table makes the trade-off visible. A recast improves monthly cash flow and keeps your end date. Keeping the same payment on the smaller balance saves more interest and ends the loan years earlier. If you are mainly after interest savings, use the mortgage payoff calculator to explore extra payments as well.
What the numbers leave out
The lump sum is cash you no longer hold. Whether to use it on the mortgage, keep it as savings or put it elsewhere depends on your whole financial picture, which this calculator does not assess. It only shows what the recast does to the loan.
Assumptions and limits
- A fixed-rate loan. The recast keeps the rate and the number of payments left, and the new payment is rounded to the cent.
- The lump sum is paid before the next regular payment, and the new payment starts with that next payment.
- The fee you enter is treated as paid in cash at the time of the recast. It is not added to the loan.
- Interest is the balance times APR / 12, rounded to the cent each month. The last payment clears any rounding difference.
- Not modeled: escrow, PMI, taxes, whether your loan type allows a recast, and what else the lump sum could do for you.
- The default rate and fee are example values. Use the figures from your own statement and servicer.
Frequently asked questions
How much does a recast lower my payment?
The payment is recalculated on the smaller balance over the same remaining term and rate. In the example a $60,000 lump sum on a $320,000 balance cuts the payment from $2,097.78 to $1,704.44, which is about 18.75% less.
Does a recast change my interest rate or end date?
No. Both stay the same. Only the monthly payment is recalculated. If you want a different rate or term, compare a refinance instead.
Is a recast cheaper than a refinance?
It usually costs far less to arrange, since lenders that offer it often charge a modest fee and do not re-underwrite the loan. Whether it is the better choice depends on your current rate compared with the rates available now.
Why is the interest saved higher if I keep my payment?
Keeping the old payment on a smaller balance pays the loan down faster, so interest stops accruing sooner. In the example it saves $187,563.99, against $67,435.69 for the recast, but the required payment stays at $2,097.78.
What if my lump sum is below the lender minimum?
Enter the minimum under More options and the page warns you. Lenders that offer a recast set their own minimum lump sum, so confirm it before you plan around the result.
Why can I not enter a lump sum equal to my balance?
A payment that large pays the loan off, which is a payoff and not a recast. Ask your servicer for an official payoff quote, and use the payoff calculator to plan smaller steps.