About the Mortgage Recast Calculator
This mortgage recast calculator shows what happens when you make a large principal payment and ask your lender to recast (re-amortize) the loan. The rate and payoff date stay the same, but the payment is recalculated on the smaller balance, so your monthly payment drops. Lenders usually charge a small fee, often a few hundred dollars, and require a minimum lump sum.
Enter your current balance, rate, months left and the lump sum. The calculator shows your current and new payment, the monthly and lifetime interest savings, and compares recasting with simply making the same lump-sum payment and keeping your old payment, which pays the loan off years earlier and saves more interest.
Recasting suits homeowners who receive a windfall or sell a previous home after buying a new one and want lower required payments without the closing costs of a refinance. Government-backed loans (FHA, VA, USDA) generally cannot be recast.
With the default inputs, the new monthly payment is $1,688.02. Change any value above to recalculate instantly.
How to use the mortgage recast calculator
- 1Enter your current balance, rate and months left from your statement.
- 2Enter the lump sum you plan to pay toward principal.
- 3Enter your lender’s recast fee.
- 4Compare the new payment with the prepay-only option.
- 5Contact your servicer to confirm eligibility and the minimum lump sum.
Formula and method
Your current payment M is the standard amortizing payment on balance B at monthly rate r over the n months remaining. After a lump sum X, a recast recalculates the payment on B − X over the same n months, so the payoff date is unchanged but every payment is lower.
Interest saved is the total interest on the old schedule minus the total on the recast schedule, less the recast fee. For comparison, the calculator also amortizes B − X while you keep paying the old M: the loan ends sooner and total interest falls further, but your required payment does not drop.
- B
- Current loan balance
- X
- Lump-sum principal payment
- r
- Monthly interest rate (annual ÷ 12)
- n
- Months remaining on the loan
Worked examples
$50k lump sum on a $300k balance
With 25 years left at 6.5%, the payment is $2,025.62. Paying $50,000 and recasting drops it to $1,688.02, saving $337.60 a month and about $51,031 of interest after the $250 fee. Prepaying without recasting would instead end the loan 95 months early and save about $143,646.
$40k recast on a 4% loan
A $40,000 payment cuts the required payment from $1,211.96 to $969.57. Net of the $500 fee, recasting saves about $17,674 of interest over 20 years.
Proceeds from selling the old home
Putting $100,000 from a previous sale toward a $450,000 loan and recasting lowers the payment by $679.61 a month and saves roughly $128,048 of interest.
Frequently asked questions
What is a mortgage recast?+
A recast (or re-amortization) recalculates your monthly payment after you make a large principal payment. Your interest rate and loan term stay the same, but the payment drops because the balance is smaller.
How much does it cost to recast a mortgage?+
Lenders that offer recasting typically charge a flat fee, often around $150 to $500, and require a minimum lump sum such as $5,000 or $10,000. There is no appraisal or credit check.
Is recasting better than refinancing?+
Recasting is cheaper and keeps your rate, which is ideal if your rate is already low. Refinancing makes sense when you can get a meaningfully lower rate or need to change the term, despite closing costs.
Can FHA or VA loans be recast?+
Generally no. FHA, VA and USDA loans usually do not allow recasting. Most conventional loans held or serviced by lenders that offer the option can be recast.
Should I recast or just pay extra principal?+
Both save interest. Paying extra without recasting saves more and shortens the loan, but your required payment stays the same. Recasting lowers the required payment, which improves cash flow and flexibility.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.