Mortgage Recast Calculator

What is a mortgage recast?

A mortgage recast, also called re-amortization, is when you pay a large chunk toward your loan's principal and your lender recalculates your monthly payment based on the smaller balance. Your interest rate stays the same. Your payoff date stays the same. Only the payment changes, and it goes down.

Without a recast, an extra principal payment still reduces your balance, but your required monthly payment doesn't budge. You just pay the loan off sooner. A recast spreads that lower balance back out over the time you have left, so the benefit shows up every month instead of at the end.

How the new payment is calculated

Your lender uses the standard amortization formula, the same one used when you first took out the loan, with three inputs:

• New balance: your current principal minus the lump sum
• Monthly rate: your annual interest rate divided by 12
• Months remaining: the time left on your original schedule

For example, on a $320,000 balance at 6.5% with 27 years left, the principal and interest payment is about $2,100. Pay down $50,000 and recast, and the payment drops to about $1,770, a difference of roughly $330 a month. The calculator above does this math for your own numbers.

Keep in mind that your total monthly payment may also include property taxes, homeowners insurance, and mortgage insurance held in escrow. A recast only changes the principal and interest portion.

Which loans can be recast?

Recasting is a lender option, not a legal right, so check with your loan servicer. In general:

Lenders that allow recasting usually also want a history of on-time payments, often a few months at minimum, and a minimum lump sum, commonly $5,000 or $10,000.

How to request a recast

1. Call your loan servicer and ask whether your loan is eligible, what the fee is, and what the minimum lump sum is.
2. Get the request in writing. Many servicers have a recast form. Some want the request submitted before or alongside the lump-sum payment.
3. Make the lump-sum payment and mark it as a principal reduction.
4. Keep paying your current amount until the servicer confirms the new payment. The whole process typically takes 45 to 60 days.
5. Check the new payment on your statement against this calculator.

For the full walkthrough, including what to ask and a sample letter, see how to request a mortgage recast.

Pros and cons of recasting

Why people recast

• Lower required payment without changing your rate. If you locked a low rate, this keeps it.
• Cheap compared to refinancing. A recast fee is a few hundred dollars. Refinancing closing costs often run into the thousands.
• No credit check or appraisal in most cases.
• Useful after a windfall, such as selling a previous home after buying a new one, an inheritance, or a bonus.

Things to weigh

• Your cash is tied up in the house. Getting it back out later means selling or borrowing against your equity.
• Less interest saved than prepaying alone. If you make the same lump-sum payment and keep paying your old amount, you'll pay off the loan years sooner and save more interest. Recasting gives up some of that in exchange for flexibility.
• Not available on government-backed loans.
• Other uses for the money may come first, like an emergency fund or paying off higher-interest debt.

For a side-by-side look, see recasting vs. extra payments, recasting vs. refinancing, and recasting vs. biweekly payments. If you're weighing the decision, read is a mortgage recast worth it? Buying before you sell? See recasting after buying a new home. Paying mortgage insurance? See recasting and PMI removal. Got an inheritance or bonus? Read recasting with a windfall, and if you're weighing a home equity line, recast vs. HELOC. New to the terms? Try the glossary. All our articles are on the guides page.

Frequently asked questions