Mortgage Recast Calculator
After a lump-sum payment, a recast (re-amortization) lowers your monthly payment while keeping the same rate and remaining term. See the new payment and interest saved.
Last updated: September 2026
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About this calculator
A mortgage recast (or re-amortization) applies a lump-sum principal payment then re-amortizes the remaining balance over the original remaining term, at the original rate. Your payment drops in proportion to the balance reduction. Unlike a refinance, there is no closing cost stack — just a small servicer fee ($150–500) and a simple form.
The monthly payment formula is the standard mortgage amortization: PMT = B × r(1+r)^n / ((1+r)^n − 1), where B is the balance after the lump sum, r is the monthly rate, and n is remaining months. Recasting keeps you on the same amortization schedule shape but shifted lower — you pay less interest total because the principal you knocked out never accrues future interest. Total interest saved ≈ lump_sum × remaining_years × 0.5 for typical rates (a rough rule of thumb).
Not all loans allow recast. FHA, VA, and USDA loans generally do not. Conventional Fannie/Freddie loans usually do, but confirm with your servicer. Jumbo and portfolio loans often do. Adjustable-rate mortgages can be recast but the payment change only lasts until the next reset.
How to use
Example — $300 000 balance, $50 000 lump sum, 6.5%, 25 years remaining. New balance = $250 000. Monthly rate = 0.065/12 = 0.005417. n = 300 months. PMT = 250 000 × 0.005417 × 1.005417^300 / (1.005417^300 − 1) ≈ $1 688. Original payment on $300 000 at these terms was about $2 025, so the recast saves ~$337/month with no rate change. Example — same paydown at 3% rate. New PMT ≈ $1 186 versus about $1 423 before. The savings are smaller in dollar terms at low rates because the interest weight of each dollar is lower. At current rates the recast is more valuable than at low legacy rates.
Frequently asked questions
How is a recast different from a refinance?
A refinance replaces the loan (new rate, new term, closing costs of 2–5% of loan). A recast keeps the loan intact — same rate, same remaining term, same servicer — and just re-amortizes after a principal paydown. Recasts have a small servicer fee ($150–500) and no credit pull or appraisal.
Does a recast lower my interest rate?
No. Recasts keep the original rate and term. To lower your rate, you must refinance. Recasting only lowers the monthly payment via principal reduction — total interest still drops, but only because you paid off principal early, not because of a rate change.
Can I recast an FHA or VA loan?
Generally no. FHA, VA, and USDA loans do not allow recasting. Conventional loans backed by Fannie Mae or Freddie Mac usually do — the servicer will confirm. If you have a government-insured loan, extra principal payments and eventual refinancing are the alternatives.
When is a recast better than a refinance?
When your current rate is at or below current market rates (refinancing would raise your rate) but you've come into a windfall you want to apply to the mortgage while lowering your payment for cashflow. Recasts also avoid resetting the amortization clock — a refinance to a new 30-year term restarts the interest-heavy front of the schedule.