Mortgage Recast Calculator
After a lump-sum prepayment, find the new monthly payment under a recast.
Overview
A mortgage recast is a one-time re-amortization performed by a lender after the borrower makes a large lump-sum principal payment. The remaining balance, the original interest rate, and the remaining term are plugged into the standard amortization formula to produce a new, lower monthly payment. The loan's maturity date does not change. Recasting is sometimes called re-amortization and is offered by most conventional lenders for a small processing fee (often $200–$500).
A recast is different from a refinance: there is no new loan, no new closing costs, no new appraisal, and no credit check. The trade-off is that the rate stays exactly where it was — if rates have dropped meaningfully, a full refinance may save more even with its closing costs. A recast is the right tool when rates are stable or higher, the borrower has a sudden windfall (bonus, sale of a home, inheritance), and the goal is to reduce monthly cash outlay without extending the loan.
How it works
Compute the post-lump balance: new_balance = current_balance − lump_sum. Compute the new payment with the standard amortization formula using the remaining term in months: P = new_balance × (r/12) / (1 − (1 + r/12)^−n_remaining). Total interest saved compared to making the lump sum and continuing the old payment is the difference between the original remaining interest and the new remaining interest, both computed by summing each month's interest accrual through the unchanged maturity date.
Examples
- $350,000 balance, 6.0% rate, 28 years remaining, current payment $2,228. After a $50,000 lump sum and recast: new balance $300,000, new payment ≈ $1,910 — about $318/month freed.
- $500,000 balance, 4.5% rate, 25 years remaining. $100,000 lump and recast: new payment drops from $2,780 to about $2,224, a $556/month decrease.
- $200,000 balance, 7.0% rate, 20 years remaining. $25,000 lump sum and recast cuts payment from $1,551 to $1,357 — $194/month.
- Same $25,000 paid in but without recasting: payment stays at $1,551, but the loan finishes about 4 years early.
FAQ
Is recasting the same as refinancing?
No. Recasting keeps the same rate and term. Refinancing replaces the loan.
Do all loans qualify?
Conventional loans usually do. FHA, VA, and most jumbo loans typically do not.
How much does it cost?
Usually a flat fee under $500. Compare that against refinance closing costs of several thousand dollars.
Will the lender recast automatically after an extra payment?
No. You must request a recast in writing and pay the fee. Without a request, extra principal just shortens the term.
Does recasting hurt my credit?
No — there is no new credit pull and the account stays open with its original history.