Mortgage Recast Calculator

What a recast is — and what it isn't

A mortgage recast (sometimes called re-amortization) is one of the most underused tools in home finance. You make a large one-time payment toward principal, pay a small fee, and your servicer recalculates your monthly payment based on the lower balance spread across the same remaining term at the same interest rate. The result is a permanently lower monthly payment without refinancing.

It is not a refinance. You don't get a new rate, you don't pay closing costs, and there's no credit check or appraisal. That's the appeal: in a higher-rate environment, refinancing to lower your payment might mean giving up a good rate, while a recast lowers your payment while keeping the rate you already have.

The math behind the result

The calculator computes your current payment from your balance, rate, and remaining term, then recomputes it from the reduced balance:

Lifetime interest saved is the difference between total interest on the old schedule and total interest on the recast schedule:

Because the term and rate are unchanged, the entire reduction comes from carrying a smaller balance. The lump sum itself isn't a "cost" — it's your own money converted from cash into home equity, which then stops accruing interest.

When a recast makes sense

• You came into a large sum — a bonus, a home sale, an inheritance — and want lower fixed costs rather than an early payoff.
• You have a rate you don't want to lose, so refinancing is unattractive.
• You bought before selling a previous home and want to "re-cast" once the old home's proceeds arrive.

It makes less sense if your rate is already low and you'd earn more investing the lump sum, or if your lender doesn't allow recasting (many do, but government-backed loans like FHA and VA generally do not).

Frequently asked questions