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Mortgage & Loans
Mortgage Recast Calculator — New Payment & Interest Saved After a Lump Sum
Lower your house payment with a lump sum — same rate, same term, no refinance
A mortgage recast is one of the most overlooked ways to lower your monthly house payment. You make a large lump-sum payment toward principal, then your lender re-amortizes the loan — recalculating your monthly payment over the same remaining term at the same interest rate on the new, smaller balance. The result is a permanently lower payment for a small flat fee (usually $250–$500), with no application, no appraisal, no closing costs, and no credit check. This is the key difference from a refinance: a recast does not change your rate or your payoff date — it only shrinks the payment to match a smaller balance.
The math uses the standard amortization formula on the reduced balance:
M = B × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
where B is the new balance after your lump sum (old balance − lump sum), r is the monthly rate (APR ÷ 12 ÷ 100), and n is the number of payments remaining (not the original term).
Worked example. Say you owe $300,000 at 6.5% with 300 months (25 years) left, and you put $50,000 toward principal and pay a $300 recast fee. The new balance is $250,000. With r = 6.5 ÷ 1200 = 0.00541667 and n = 300, the old payment was about $2,025.62; the recast payment on $250,000 is about $1,688.02. That's roughly $337.60 less every month. Because the loan is shorter at the same rate, the lifetime interest also drops sharply — well over $50,000 in interest saved compared with simply keeping the original payment schedule.
The most common mistake is confusing a recast with prepaying alone. If you just throw $50,000 at the principal without recasting, your monthly payment stays exactly the same — you simply pay the loan off early. A recast instead lowers the payment immediately. The second mistake is assuming the term resets: it does not. Your remaining term stays put, which is why a recast saves interest rather than stretching it out the way a fresh 30-year refinance can.
Use this calculator to enter your current balance, rate, months remaining, lump sum, and recast fee, and it will show your new monthly payment, your monthly savings, and the total interest saved.
This tool provides informational estimates only, not a loan offer or financial advice; your lender sets the actual recast fee, minimum lump sum, and eligibility — many loans (notably FHA, VA and USDA) cannot be recast.
Calculator
Fill in the fields and click "Calculate" for instant results.
📰 Formula
• New balance B = current balance − lump-sum payment • Monthly rate r = APR ÷ 12 ÷ 100 • n = number of payments remaining (unchanged by the recast) • New payment M = B × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1) • Monthly savings = old payment − new payment • Total interest saved = (old payment × n) − (new payment × n) − lump sum
📰 Formula
• New balance B = current balance − lump-sum payment • Monthly rate r = APR ÷ 12 ÷ 100 • n = number of payments remaining (unchanged by the recast) • New payment M = B × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1) • Monthly savings = old payment − new payment • Total interest saved = (old payment × n) − (new payment × n) − lump sum
🧪 Worked examples
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Example 2
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Example 3
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Example 4
⚠️ Common mistakes
- Confusing a recast with prepaying — prepaying alone shortens the term but does NOT lower the payment.
- Assuming the term resets; a recast keeps the same remaining months and rate.
- Plugging the yearly rate straight into the formula — convert it to a monthly decimal first (6.5% becomes 0.00541667, i.e. 6.5 ÷ 12 ÷ 100).
- Forgetting the recast fee, or assuming every loan qualifies (FHA, VA and USDA loans usually can't be recast).
💡 Tips
- A recast keeps your rate — ideal when today's market rates are higher than your existing loan.
- Ask your lender for the minimum lump sum (often $5,000–$10,000) and the flat recast fee before you commit.
- If you want the payment gone faster instead of smaller, skip the recast and just prepay principal — same money, different goal.
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❓ Frequently asked questions
What is a mortgage recast?
A recast is when you make a large lump-sum payment toward your principal and the lender re-amortizes the loan — recalculating a lower monthly payment over the same remaining term at the same interest rate. It lowers your payment for a small flat fee without refinancing.
How is the new payment after a recast calculated?
The lender applies the standard amortization formula M = B × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1) to the new balance B (old balance minus your lump sum), using your existing monthly rate r and the number of payments remaining n. Rate and term don't change — only the balance.
What's the difference between a recast and a refinance?
A refinance replaces your loan with a new one — new rate, new term, an application, appraisal, credit check and thousands in closing costs. A recast keeps your existing rate and payoff date, requires no credit check or appraisal, and costs only a flat fee (usually $250–$500).
Does a mortgage recast lower my interest rate?
No. A recast keeps your existing interest rate exactly the same. It only lowers the monthly payment by spreading a smaller balance over the same remaining term. If you want a lower rate, that's a refinance, not a recast.
Does a recast shorten my loan term?
No. The remaining term stays the same. Your payment goes down because the balance is smaller, but your payoff date doesn't move. If you'd rather finish the loan early, prepay the principal without recasting instead.
How much does a mortgage recast cost?
Most lenders charge a flat recast fee of about $250 to $500. There are no closing costs, appraisal fees, or application fees like a refinance — just the one-time servicing fee plus your lump-sum principal payment.
How much do I have to pay to recast my mortgage?
Lenders set a minimum lump sum, commonly $5,000 to $10,000 toward principal, plus the flat recast fee. The larger your lump sum, the lower your new payment, since the new payment is based on the reduced balance.
Can any mortgage be recast?
No. Most conventional loans can be recast, but government-backed loans — FHA, VA and USDA — generally cannot. Some jumbo loans also exclude recasting. Always confirm eligibility, the minimum lump sum and the fee with your loan servicer first.
Is recasting or just prepaying my mortgage better?
They use the same money for different goals. A recast lowers your monthly payment but keeps the same payoff date. Prepaying the same amount without recasting keeps your payment unchanged but pays the loan off sooner and saves more total interest. Choose based on whether you want cash-flow relief or faster payoff.