Mortgage Recast Calculator
See how much a mortgage recast lowers your monthly payment after a lump-sum principal payment, how much interest you save, and how it compares with keeping your old payment.
Results
| Item | Value |
|---|
Quick Answer
A recast keeps your rate and payoff date but spreads a smaller balance over the months left. With $300,000 left at 6.5% over 300 months, a $50,000 lump sum cuts the payment from $2,025.62 to $1,688.02, saving $337.60 a month and $51,281 of interest over the loan.
Embed this calculator
Adjust the size if needed, then copy the code below into your page or blog. The calculator will load in an iframe and stay updated automatically.
Table of Contents
- Mortgage Recast Calculator
- Quick Answer
- Related Calculators
- How This Mortgage Recast Calculator Works
- How to Use the Mortgage Recast Calculator
- Mortgage Recast Formula
- Key Terms
- Worked Example
- Real-Life Examples
- Mortgage Recast vs Refinance
- Payment Drop per $10,000 Lump Sum
- Recast or Keep the Old Payment?
- Common Mistakes to Avoid
- Frequently Asked Questions
- References & Sources
How This Mortgage Recast Calculator Works
A mortgage recast, also called re-amortization, is when you pay a large lump sum toward your principal and your lender recalculates the monthly payment on the lower balance. Your interest rate and payoff date stay the same, so the payment goes down. Enter your current balance, rate, months left, the lump sum and the lender’s fee. The calculator shows your new payment, the monthly and lifetime savings, how long the fee takes to pay back, and what happens if you make the lump-sum payment but keep paying the old amount instead.
Quick explanation: a recast trades cash today for a lower payment every month.
- Same rate: no new loan, credit check or closing costs.
- Same end date: the loan still ends when it was going to.
- Lower payment: the smaller balance is spread over the remaining months.
How to Use the Mortgage Recast Calculator
- Enter your current loan balance from your latest statement.
- Enter your interest rate and the number of months left.
- Enter the lump sum you plan to pay.
- Enter the recast fee your servicer charges.
- Press Calculate and compare the recast with keeping your old payment.
Mortgage Recast Formula
- Monthly rate: r = annual rate ÷ 12 ÷ 100
- Payment: balance × r ÷ (1 − (1 + r)−n), with n = months left
- New payment: the same formula with balance − lump sum
- Interest saved: (old payment − new payment) × n − lump sum
- Fee break-even: fee ÷ monthly saving
Key Terms
- Recast: recalculating a mortgage payment after a lump-sum principal payment, keeping the rate and term.
- Re-amortization: another name for a recast: a new payment schedule over the remaining months.
- Principal: the amount you still owe, not counting interest.
- Servicer: the company that collects your payments and handles recast requests.
- Break-even: the number of months for the monthly saving to cover the fee.
Worked Example
You owe $420,000 at 7% with 336 months left and put down $100,000; the servicer charges $500.
- Current payment = $2,854.36
- New payment on $320,000 = $2,174.75
- Monthly saving = $679.61; the $500 fee is earned back in 0.7 months
- Interest saved over the loan = $128,348
- Keeping the old payment instead pays the loan off in 183 months and saves $338,270 of interest
Real-Life Examples
- Home sale proceeds: put $50,000 on a $300,000 loan at 6.5% and the payment falls by $337.60 a month.
- Low-rate loan: a $20,000 lump sum on $180,000 at 4% with 240 months left cuts the payment by $121.20.
- Budget planning: see the exact new payment before you call your servicer.
- Fee check: make sure the fee is earned back long before you plan to sell.
Mortgage Recast vs Refinance
- Recast: same loan, same rate and end date, a small fee, no credit check. You need a lump sum.
- Refinance: a new loan with a new rate and term, closing costs of about 2% to 5%, and full approval.
- Choose a recast when you already have a good rate; choose a refinance when rates are much lower.
Payment Drop per $10,000 Lump Sum
Each $10,000 of lump sum lowers the payment by about this much.
| Rate | 360 months left | 300 months left | 240 months left | 180 months left |
|---|---|---|---|---|
| 3% | $42.16 | $47.42 | $55.46 | $69.06 |
| 4% | $47.74 | $52.78 | $60.60 | $73.97 |
| 5% | $53.68 | $58.46 | $66.00 | $79.08 |
| 6% | $59.96 | $64.43 | $71.64 | $84.39 |
| 6.5% | $63.21 | $67.52 | $74.56 | $87.11 |
| 7% | $66.53 | $70.68 | $77.53 | $89.88 |
| 7.5% | $69.92 | $73.90 | $80.56 | $92.70 |
| 8% | $73.38 | $77.18 | $83.64 | $95.57 |
Recast or Keep the Old Payment?
Any lump sum toward principal saves interest. The question is what you want from it. With a recast your payment drops and your monthly budget gets easier, but the loan ends on the same date. If you make the same prepayment without a recast and keep paying the old amount, you save more interest and own the home sooner, but your required payment never falls.
A recast often makes sense after selling a home when you bought the next one first, after an inheritance or bonus, or when you want lower fixed costs going into retirement. Refinancing makes more sense if rates have dropped a lot, because a recast never changes your rate. Check that you still keep an emergency fund after paying the lump sum, because money put into a house is hard to get back out.
Eligibility depends on who owns your loan. Fannie Mae allows servicers to re-amortize loans after a large principal payment, and most conventional loans qualify. Government-backed FHA, VA and USDA loans generally do not allow recasts.
Common Mistakes to Avoid
- Using the original loan amount. Use the current balance and months left.
- Expecting a lower rate. A recast never changes the interest rate.
- Forgetting escrow. Taxes and insurance stay the same; only principal and interest drop.
- Draining savings. Keep an emergency fund; home equity is hard to access quickly.
- Assuming every loan qualifies. FHA, VA and USDA loans usually cannot be recast.
Frequently Asked Questions
Paying a lump sum toward principal and having the lender recalculate your payment over the remaining term at the same rate.
It depends on the rate and months left. At 6.5% with 300 months left, each $10,000 lowers the payment by about $67.
Servicers usually charge a flat fee, often a few hundred dollars.
Many servicers ask for $5,000 to $10,000 or more. Check with yours.
Generally no. Recasts are mainly for conventional loans.
Keeping the old payment after a prepayment saves more interest and ends the loan sooner; a recast lowers your required payment.
No credit check is usually needed, and the loan stays the same account.
No. The loan ends on the same date; only the monthly payment changes.
Some servicers allow it, often with limits. Ask your servicer.
References & Sources
| Source | Used For | Link |
|---|---|---|
| Fannie Mae, Recast Loan Overview (Selling Guide job aid) | Re-amortization after a substantial principal curtailment. | https://singlefamily.fanniemae.com/job-aid/loan-delivery/topic/loan_delivery_job_aids_recast_loan_overview.htm |
| Consumer Financial Protection Bureau, What is amortization? | How a fixed-rate payment is split between interest and principal. | https://www.consumerfinance.gov/ask-cfpb/what-is-amortization-and-how-could-it-affect-my-auto-loan-en-873/ |