A recast is one of the least-known ways to lower a mortgage payment: you make a large one-time principal payment, the lender re-amortizes the loan, and your monthly bill drops — all without changing your rate or your payoff date. This calculator shows the new payment and interest saved, and puts a recast head-to-head against the two moves people confuse it with: refinancing and simply making an extra payment.

How a recast works

When you recast, you pay a lump sum toward principal and the lender recalculates your monthly payment using the standard amortization formula on the smaller balance — keeping the same interest rate and the same number of months remaining. Because the term and rate are unchanged, the only thing that moves is the payment, which falls in proportion to the principal you knocked out.

That is the key difference from a refinance: a recast keeps your existing loan. There is no new rate, no appraisal, no credit pull, and no multi-thousand-dollar closing bill — just a flat administrative fee, usually $150 to $500, and often a minimum lump sum the lender requires before they will process it (commonly $5,000 to $10,000).

Recast vs refinance vs extra payments

Recast lowers your required monthly payment but keeps the original payoff date — best when you want breathing room in your monthly budget without giving up a low locked-in rate.

Refinancing replaces the loan entirely with a new rate, term, and closing costs. It only wins when a meaningfully lower rate offsets those costs and the reset amortization clock — this calculator's break-even and lifetime-interest comparison make that trade-off explicit rather than relying on the payment alone.

Making an extra payment without recasting applies the same lump sum but keeps your old, higher payment — so the loan amortizes faster and you save more total interest than a recast. Same money, opposite lever: recast for cash-flow relief, extra payment for the fastest debt-free date.

Eligibility, limits, and the invest-instead question

Not every loan can be recast. Conventional loans backed by Fannie Mae and Freddie Mac generally allow it, but government-backed loans — FHA, VA, and USDA — typically do not. Your rate and remaining term are inputs, not outputs: a recast cannot change either.

Before committing a windfall to your mortgage, it's worth asking whether investing it would do more. The "invest the lump sum instead" comparison projects a simple future value at an assumed return and stacks it against the recast's interest saved — a pre-tax, illustrative comparison, not investment or tax advice. This tool is an estimate: your lender's exact fee, minimum-principal rule, and re-amortization timing govern the real result, and an escrow change for taxes and insurance can shift your total monthly bill independently of the principal-and-interest figure shown here. Confirm the details with your servicer before sending a payment.