A mortgage recast calculator shows you exactly how much your monthly payment could drop if you apply a lump sum of cash toward your loan's principal and ask your lender to re-amortize the remaining balance over your existing term. Unlike a refinance, a recast keeps your original interest rate and payoff date β it simply spreads a smaller balance across the same remaining months, which lowers the payment without any new loan, new closing costs, or new credit check.
Arb Digital built this mortgage recast calculator so homeowners who've come into extra cash β an inheritance, a bonus, proceeds from selling another property β can quickly see whether recasting makes sense before calling their loan servicer. It's free, private, and gives you real numbers in seconds.
What This Mortgage Recast Calculator Does
This tool takes your current mortgage balance, subtracts the lump-sum payment you plan to make, and then re-amortizes the resulting smaller balance over your remaining loan term at your existing interest rate. The result is your new, lower monthly payment. The calculator also shows your old payment, the monthly savings, and an estimate of the total interest you'll avoid paying over the life of the loan by carrying a smaller balance from this point forward.
Recasting is different from making extra principal payments on your own, which reduces your balance and shortens your loan but usually doesn't change your required monthly payment unless you specifically request a recast from your servicer. It's also different from refinancing, which replaces your loan entirely, often with a new rate, new term, and new closing costs. A recast simply resets the amortization schedule on your existing loan.
How to Use the Mortgage Recast Calculator
- Enter your current mortgage balance. You can find this on your latest mortgage statement or your lender's online portal.
- Enter the lump-sum amount you plan to pay. This is the extra cash you intend to apply directly to principal, separate from your regular monthly payment.
- Enter your current interest rate. A recast does not change your rate, so use the rate you're already paying.
- Enter your remaining term in months. If you have 25 years left on a 30-year loan, that's 300 months.
- Click Calculate Recast Savings to see your new payment, monthly savings, and estimated lifetime interest savings.
The Formula β How Mortgage Recasting Is Calculated
A recast starts by subtracting your lump-sum payment from your current balance to arrive at a new, lower principal balance. That new balance is then run through the standard mortgage amortization formula, spread over your remaining number of months at your existing interest rate, to calculate a new required monthly payment. Because the rate and term don't change, the entire benefit of a recast comes from paying interest on a smaller balance going forward.
The monthly interest rate used in amortization is your annual rate divided by 12, and the payment formula accounts for both principal and interest so that the loan fully pays off exactly at the end of the remaining term, just like your original loan did. This calculator estimates total interest saved by comparing the total interest that would have been paid on the original balance over the remaining term against the total interest on the new, recast balance. For general background on how amortization and loan servicing work, see the Consumer Financial Protection Bureau's guidance on mortgage recasting.
Recasting vs. Refinancing β Which Saves You More?
Homeowners with a windfall often assume refinancing is their only option, but a recast can be faster, cheaper, and simpler in many situations. Refinancing replaces your loan entirely: you'll go through underwriting, pay closing costs that often run 2% to 5% of the loan amount, and potentially reset your amortization clock, meaning you pay mostly interest again in the early years even if you land a lower rate. A recast, by contrast, typically costs a flat fee of a few hundred dollars, requires no credit check or appraisal, and keeps your existing rate and remaining term exactly as they are.
The trade-off is that recasting can't get you a lower interest rate β if rates have dropped significantly since you took out your loan, a refinance might save you more over time even after closing costs, especially if you also want to shorten or extend your term. Recasting makes the most sense when you already have a good rate and simply want to reduce your monthly obligation using cash you already have, without touching your rate or restarting your amortization schedule.
Who Should Consider a Mortgage Recast
Recasting tends to be a great fit for a specific set of situations. If you recently sold a previous home and are waiting for the proceeds, or if you received a large bonus, inheritance, or matured investment, a recast lets you put that money to work immediately without disturbing your existing loan terms. It's also popular among homeowners who made a smaller down payment at purchase β perhaps because their previous home hadn't sold yet β and want to apply the sale proceeds afterward to reduce their payment to what it would have been with a larger down payment from day one.
Recasting is generally not available on all loan types; conventional loans usually allow it, but many government-backed loans such as FHA, VA, and USDA loans do not permit recasting under standard program rules. It's also worth checking whether your servicer charges a recast fee and whether there's a minimum lump-sum amount required, since some lenders set thresholds such as $5,000 or $10,000 before they'll process a recast request.
- Good fit: You have a lump sum, you like your current rate, and you want lower payments without new closing costs.
- Better to refinance: Current rates are meaningfully lower than your existing rate, or you want to change your loan term.
- Check first: Whether your loan type and servicer allow recasting, and what fee applies.
Before you call your servicer, see how a full refinance or an escrow adjustment would compare to a simple recast using our other mortgage tools.
Mortgage Refinance Calculator All Free ToolsHow to Request a Recast From Your Servicer
The process for requesting a mortgage recast is generally simpler than most homeowners expect, but it does require you to take the first step β a recast doesn't happen automatically just because you sent in extra money. Start by calling your loan servicer directly, since the department that handles recasts is often separate from general customer service, and ask specifically for a "loan recast" or "re-amortization request," using that exact terminology to avoid confusion with a standard extra-principal payment.
Your servicer will typically confirm your eligibility based on your loan type, tell you the exact fee, and specify the minimum lump-sum amount required, if any. Once you submit the lump-sum payment and any required paperwork, processing usually takes anywhere from a few days to a few weeks, and your servicer will send you a new amortization schedule reflecting your lower monthly payment going forward. It's worth confirming in writing exactly when your new, lower payment takes effect, since some servicers apply it starting the following billing cycle while others may take an extra cycle to update their systems.
Recasting Multiple Times Over the Life of Your Loan
Depending on your servicer's policies, you may be able to recast your mortgage more than once, which can be a useful strategy if you expect to receive additional lump sums over time β for example, from vesting stock compensation, periodic bonuses, or the sale of other assets. Each recast further reduces your balance and your required payment, compounding your savings over the life of the loan. However, most servicers charge a separate fee for each recast request, so it's worth weighing whether it makes more sense to save up a larger lump sum and recast less frequently, versus recasting each time you have extra cash available.
It's also worth noting that recasting doesn't reduce your loan term β your original payoff date stays the same regardless of how many times you recast, since the whole point of the process is to lower your payment rather than pay the loan off faster. If shortening your loan term is your primary goal rather than lowering your monthly payment, making extra principal payments without a formal recast, or refinancing into a shorter term, may better fit your objective.
Common Mistakes to Avoid
- Assuming a recast automatically lowers your payment. You must formally request a recast from your servicer β an extra principal payment alone usually doesn't change your required monthly payment.
- Not checking your loan type. Many government-backed loans don't offer recasting, so confirm eligibility before you count on it.
- Ignoring the recast fee. While generally small, it's worth confirming the exact fee and any minimum lump-sum requirement with your servicer.
- Comparing only the new payment, not lifetime interest. A recast's real value is often better measured in total interest saved over the remaining term, not just the monthly number.
- Overlooking a refinance opportunity. If rates have fallen well below your current rate, run the numbers on a refinance too before committing to a recast.
Related Free Tools From Arb Digital
Pair this calculator with our Mortgage Refinance Calculator, Mortgage Calculator, Mortgage Escrow Calculator, or Second Mortgage Calculator to see the full picture of your home financing options. You can also browse our complete free online tools hub for more mortgage and personal finance calculators.
Frequently Asked Questions
Mortgage recasting is when you make a lump-sum payment toward your principal and your lender re-amortizes your remaining balance over the same term and rate, lowering your monthly payment.
No. Recasting keeps your existing interest rate and remaining term exactly the same; only your monthly payment changes because it's calculated on a smaller balance.
Refinancing replaces your loan with a new one, often at a new rate and term, and involves underwriting and closing costs. Recasting keeps your original loan and simply resets the payment based on a smaller balance.
Recast fees are typically a few hundred dollars, far less than refinance closing costs, though the exact amount varies by servicer.
No. Conventional loans commonly allow recasting, but many FHA, VA, and USDA loans do not permit it under standard program guidelines.
Many servicers require a minimum lump-sum payment, often in the range of a few thousand dollars, before they'll process a recast request.
This tool provides general estimates for educational purposes only and is not financial, tax, legal, or medical advice. Figures are illustrative; consult a licensed professional for decisions.
