Mortgage Recast Calculator

Enter the balance as it stands today, not the original loan amount, along with your rate and the months remaining. A 30-year loan four years in has 312 months left, which is what the example uses.

Add the lump sum you intend to apply. Applying $50,000 to a $320,000 balance leaves $270,000, and re-amortising that over 312 months at 6.5% produces the $1,795.28 payment. Total interest over the rest of the loan falls from $343,853.94 to $290,126.76, so the recast itself saves $53,727.18 in interest.

Then enter the recast fee your servicer quotes. Because the fee is flat and the saving is monthly, break-even is almost immediate: $300 ÷ $332.46 = 0.9 months. This is the single largest structural difference between a recast and a refinance, where several thousand dollars of closing costs usually take two to four years to earn back.

The last output is the one most calculators leave out. Applying the same $50,000 but keeping the old $2,127.74 payment clears the loan in 216 months instead of 312, eight years early, with only $189,591.19 of interest. That is $100,535.57 less interest than the recast produces, because every dollar above the recast payment goes straight to principal. The recast buys cash-flow relief; not recasting buys a shorter loan. Both are defensible, but they are not the same decision.

Recasting is less dramatic when the rate is low and the balance is modest, and the numbers should say so. Take a $185,000 balance at 4.25% with 228 months (19 years) remaining, and a $20,000 lump sum against a $250 fee.

The current payment is $1,183.99. After the lump sum the balance is $165,000 and the re-amortised payment is $1,055.99, a saving of $128.00 a month, or $1,535.98 a year. Interest over the remaining term falls from $84,948.92 to $75,765.25, a $9,183.67 saving, and the $250 fee is recovered in under two months.

Keeping the old payment instead retires the loan in 193 months rather than 228, 35 months early, with $63,509.39 of interest, another $12,255.86 saved. The relative gap is smaller than in the first example because a 4.25% rate compounds far less punishingly than 6.5%, which is exactly the point: the higher your rate, the more the aggressive option is worth, and the more a recast costs you in long-run interest for the cash flow it frees up.

One thing neither example changes is the payoff date after a recast. If you want the loan gone sooner, a recast is the wrong tool. The biweekly mortgage payoff calculator models the opposite approach, where a small permanent increase in what you pay each year shortens the term without any lump sum at all.

Recast versus refinance is the comparison most people are actually making. A recast keeps your existing note: no credit pull, no appraisal, no underwriting, no new closing costs, and critically no new rate. If you are sitting on a 3.5% loan, refinancing to today's rates to lower a payment is self-defeating, and a recast is the only way to reduce the payment without giving up the rate. If your rate is well above market, the calculus flips and the refinance break-even calculator is the right tool, because a lower rate can beat a smaller balance.

Recast versus prepay is the comparison people skip. Both start with the same cheque to the servicer. The recast converts the lump sum into monthly cash flow; plain prepayment converts it into a shorter loan and much less interest. In the first example the difference is $332 a month against $100,536 of interest and eight years. Neither answer is universally right: freed-up cash flow has real value if it lets you keep working through a lean period, invest at a higher return, or absorb an income drop.

Not every loan can be recast. Conventional loans held by Fannie Mae or Freddie Mac generally can be; FHA, VA, and USDA loans generally cannot. Jumbo and portfolio loans vary entirely by lender. Confirm with your servicer before you send money, because a lump sum applied without a recast agreement is simply a principal prepayment (helpful, but it will not lower your payment).

For the wider picture, the mortgage calculator builds the payment from scratch including taxes and insurance, and the mortgage points break-even calculator handles the other common "should I pay cash up front" question: buying down the rate at origination rather than paying down principal later.

This calculator performs exact amortisation arithmetic on the figures you enter and assumes a fixed rate for the remainder of the term. On an adjustable-rate mortgage the post-recast payment will change again at the next adjustment, and the interest totals shown here will not hold. It also assumes the lump sum is applied as a principal reduction on the recast date, which is how servicers process it, but the exact effective date can shift the first month's interest slightly.

The payment shown is principal and interest only. Property taxes, homeowners insurance, mortgage insurance, and HOA dues are unaffected by a recast, so your actual monthly bill will fall by the amount shown here and no more. If you carry private mortgage insurance, a large principal reduction may also let you request PMI removal once the balance crosses 80% of the original value, a separate saving this tool does not model.

Nothing here accounts for the opportunity cost of the lump sum. Money used to pay down a 4.25% mortgage earns a guaranteed 4.25% after-tax equivalent return, which may or may not beat what the same money would do invested, held as an emergency fund, or applied to higher-rate debt. Recasting also permanently converts liquid savings into illiquid home equity, recoverable only by selling or borrowing against the house. This is a general educational tool, not financial advice. Confirm recast eligibility, minimum lump sums, and fees with your servicer, and consult a qualified professional about your own situation.

If the goal is a shorter loan rather than a smaller payment, the Biweekly Mortgage Payoff Calculator shows what one extra payment a year does to the term. If your rate is above market, run the Refinance Break-Even Calculator before assuming a recast is the cheaper route, and the Mortgage Points Break-Even Calculator for the same question at origination. To rebuild the whole payment including escrow items, start from the Mortgage Calculator, and the Mortgage Guide covers the payment formula this page re-runs twice.