Reamortize

Guide

Mortgage Recast Glossary

Updated October 2026 · 4 min read

Plain-English definitions of the terms that come up when you look into recasting, refinancing, or paying down a mortgage. Each one links to a guide that goes deeper.

Loan basics

Principal
The amount you still owe on the loan, not counting interest. A recast lowers your payment by lowering the principal.
Interest rate
The yearly cost of borrowing, as a percentage of the principal. A recast keeps your rate the same. A refinance replaces it.
Term
The length of the loan, such as 30 or 15 years. "Remaining term" is the time left until it's paid off on schedule.
Maturity date
The date the loan is scheduled to be fully paid off. A recast doesn't change it.
Servicer
The company you send payments to and that handles requests like recasts. It may not be the lender that made your loan, and it can change if the loan is transferred.
Investor
The company that owns your loan, often Fannie Mae, Freddie Mac, or a bank. The investor's rules can affect whether your servicer allows a recast.

Payments

Amortization
Paying off a loan through regular payments that cover interest and gradually reduce principal. Early payments are mostly interest; later ones are mostly principal.
Amortization schedule
A table showing each payment, how much goes to interest and principal, and the balance afterward. The calculator shows a yearly version after recasting.
Principal and interest (P&I)
The part of your monthly payment that repays the loan. This is the only part a recast changes.
Escrow
An account your servicer uses to pay property taxes and homeowners insurance (and sometimes mortgage insurance) from your monthly payment. A recast doesn't change it.
PITI
Principal, interest, taxes, and insurance: your full monthly housing payment when escrow is included.
Extra principal payment (prepayment)
Any amount paid beyond the required payment that goes straight to reducing principal. Without a recast, it shortens the loan rather than lowering the payment. See recasting vs. extra payments.
Prepayment penalty
A fee some loans charge for paying off a large share of the balance early. Most residential mortgages today don't have one, but check your loan documents.
Biweekly payments
Paying half your monthly payment every two weeks, which adds up to one extra payment a year. See recast vs. biweekly payments.

Recasting

Recast (re-amortization)
Making a lump-sum principal payment and having your servicer recalculate the monthly payment over the remaining term at the same rate. Your payment goes down; your rate and payoff date stay the same.
Lump sum
The one-time principal payment that triggers a recast. Servicers often set a minimum, commonly $5,000 to $10,000.
Recast fee
What the servicer charges to process a recast, typically about $150 to $500.
Break-even
How long the lower payment takes to make up for the fee: the fee divided by the monthly payment drop. See is a recast worth it?
Seasoning
How long a loan has been in place, or how many payments have been made. Some servicers require a minimum before they'll recast.

Loan types

Conventional loan
A mortgage not insured or guaranteed by a government agency. These are the loans most often eligible for a recast.
Conforming loan
A conventional loan within the size limits and rules set for loans Fannie Mae and Freddie Mac can buy.
Jumbo loan
A loan larger than the conforming limit. Recast rules vary more by lender. See recasting ARM and jumbo loans.
FHA, VA, and USDA loans
Loans backed by a government agency. They generally can't be recast, though you can still make extra principal payments.
Fixed-rate mortgage
A loan whose rate stays the same for the whole term.
Adjustable-rate mortgage (ARM)
A loan whose rate is fixed for an initial period and then adjusts periodically. Most recalculate the payment on the current balance at each adjustment.

Mortgage insurance and equity

Loan-to-value ratio (LTV)
Your loan balance divided by the home's value. It decides things like whether you need mortgage insurance and how much you can borrow against your home.
Equity
The part of your home's value you own outright: its value minus what you owe.
Private mortgage insurance (PMI)
Insurance on conventional loans with less than 20% down, paid by the borrower to protect the lender. It can usually be cancelled at 80% of the home's original value. See recasting and PMI removal.
Mortgage insurance premium (MIP)
The FHA version of mortgage insurance. For most recent FHA loans it lasts 11 years or the life of the loan, depending on the down payment.

Alternatives to recasting

Refinance
Replacing your mortgage with a new one, usually to change the rate or term. It typically involves closing costs, a credit check, and an appraisal. See recast vs. refinance.
Cash-out refinance
A refinance for more than you owe, taking the difference in cash.
Closing costs
Fees paid when a loan is made or refinanced, such as lender, appraisal, and title fees, often 2% to 6% of the loan.
Home equity line of credit (HELOC)
A credit line secured by your home that you can draw on as needed, usually at a variable rate. See recast vs. HELOC.
Home equity loan
A lump-sum second loan secured by your home, usually at a fixed rate.
Bridge loan
A short-term loan against your current home that helps you buy a new one before selling. See recasting after buying a new home.

More recast guides