🏠 Mortgage Recast Calculator
Calculate your new, lower monthly payment after making a lump sum principal payment.
Current Loan Details
Old Monthly Payment
Interest Saved Over Life of Loan
* Payments shown are Principal & Interest only. Escrow for taxes/insurance remains unaffected by a recast.
What is a Mortgage Recast?
A mortgage recast is a secret weapon for homeowners. If you come into a large chunk of cash (from an inheritance, work bonus, or selling another property), you can apply that lump sum to your mortgage principal.
Instead of just paying your loan off faster (which happens if you make extra payments normally), a recast forces the bank to recalculate your amortization schedule based on the new, smaller balance. The result? Your interest rate stays the same, your payoff date stays the same, but your required monthly payment goes down significantly.
Recasting vs Refinancing
Many people confuse recasting with refinancing. Here is the difference:
- Refinancing: You take out a brand new loan. This means a new interest rate (which might be higher than your current one!), a new term (e.g. starting a new 30 years), and high closing costs ($2,000 to $5,000+).
- Recasting: You keep your exact same loan, interest rate, and term. You just pay a small administrative fee (usually around $250) for the bank to do the math to lower your monthly bill.
If you already have a very low interest rate, you should never refinance just to lower your payment. Recasting is the much smarter financial move.