A recast keeps your rate and term exactly as they are — only the balance drops after a lump sum, and the lender recalculates a lower payment against it.
How it works
The lump sum reduces the remaining balance. The new, lower balance is re-amortized over the same remaining term at the same rate, producing a lower monthly payment without changing the loan’s payoff date.
What this does not include
This doesn’t include the lender’s recast fee (often $150-$500, a flat charge unrelated to the payment math) — a real, if usually modest, cost of using a recast.
How to use this calculator
- Enter your remaining balance, lump-sum payment, interest rate, and remaining term.
A worked example
A $250,000 remaining balance, $50,000 lump-sum payment, 6% rate, 300 months remaining: old payment = $1,610.75, new payment after recast = $1,288.60, monthly savings = $322.15.
What the variables mean
| Variable | Meaning |
|---|---|
| Remaining balance | Mortgage balance before the lump sum |
| Lump sum | Extra payment applied toward principal |
| Rate | Current interest rate |
| Remaining months | Months left on the loan term |
Edge cases worth knowing
Recasting lowers the monthly payment without changing the interest rate or term — unlike refinancing, which can change both. It simply re-amortizes the same loan over the same remaining time using the smaller balance.
A lump sum that exceeds the remaining balance is impossible — the calculator declines to show a result for that case, since it would mean paying off more than what’s owed.
Frequently asked questions
How is recast different from refinancing?
Refinancing replaces the loan entirely with a new rate, term, and closing costs; recasting keeps the same loan and rate, simply lowering the payment against a smaller balance for a small flat fee.
Does recasting shorten my loan term?
No — the payoff date stays the same; only the monthly payment drops, unlike making extra payments toward an early payoff, which shortens the term instead.
Do all lenders and loan types allow recasting?
No — recasting availability depends on the lender and loan type; many conventional loans allow it, but some loan types (including many FHA and VA loans) generally do not.
