Mortgage Recast Calculator
Estimate the new monthly payment after a lump-sum principal payment when your mortgage is recast over the remaining term, plus the monthly savings.
Results · USD
New monthly P&I
Monthly savings
- Previous monthly P&I
- $2,097.78
- New balance
- $280,000.00
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Educational estimates · not financial advice · free, no signup
How this was calculated
Old and new payments use standard amortization on current vs post-lump balance over the same remaining years. Servicers may charge a recast fee.
Want more detail? Full formula notes & FAQs ↓
Detailed guide
What it is, how to use it, how to read the numbers, common mistakes, a worked example, formulas, and FAQs.
What this calculator is
A mortgage recast, sometimes called re-amortization, happens when you make a large one-time principal payment and the lender recalculates your monthly payment on the lower balance, keeping the same interest rate and end date. Unlike refinancing, there is no new loan or rate, and fees are usually small, though the lender may require a minimum lump sum and a fee. This calculator compares the old payment with the new one after a lump sum on the current balance, using the remaining term. It helps you decide whether to put a windfall, such as a bonus or home sale proceeds, into a recast, or to keep the payment and shorten the term instead. It models principal and interest only.
When to use / who it helps
- You received a large sum and want to lower your monthly payment.
- You want to compare a recast with a refinance.
- You want to see how much a lump sum reduces the payment.
- You are checking your lender's recast terms.
- You are deciding between a recast and keeping the payment to pay off sooner.
How to use
Steps
- Enter the current principal balance.
- Enter the annual interest rate.
- Enter the remaining term in years.
- Enter the lump-sum principal payment.
- Read the new payment, previous payment and monthly savings.
- Subtract any recast fee from the long-run savings.
How to interpret results
- The new payment is based on the reduced balance over the same remaining term.
- Monthly savings are the old payment minus the new payment.
- The interest rate stays the same after a recast.
- Keeping the old payment instead would shorten the loan and save more total interest.
- Escrow for taxes and insurance is not included.
Common mistakes & gotchas
- Assuming a recast changes the interest rate.
- Forgetting the lender's fee and minimum lump sum.
- Using the original term instead of the remaining term.
- Comparing a recast with a refinance without considering rates.
- Overlooking that a recast may not be available on all loans.
Worked example
Worked example — $320,000 balance, 6.5%, 27 years left, $40,000 lump sum
- Previous payment on $320,000 over 324 months: about $2,097.78.
- New balance after the lump sum: 320,000 − 40,000 = $280,000.
- New payment on $280,000: about $1,835.55.
- Monthly savings: 2,097.78 − 1,835.55 = $262.22, or about $84,959 over the remaining 324 months.
Result: The payment falls from $2,097.78 to $1,835.55, saving $262.22 a month.
To load the form's own demo values, tap Try example above the Calculate button.
How to calculate / formula
Old and new payments use standard amortization on current vs post-lump balance over the same remaining years. Servicers may charge a recast fee.
Frequently asked questions
What is a mortgage recast?
A recalculation of your payment after a large principal payment, keeping the same rate and term.
How is it different from refinancing?
A refinance replaces the loan with a new one, possibly at a new rate; a recast keeps the existing loan.
Does a recast lower my interest rate?
No.
What does it cost?
Lenders may charge a fee and require a minimum lump sum, so ask yours.
Is it better to recast or keep the payment?
Keeping the payment pays off the loan sooner and saves more interest; a recast improves monthly cash flow.
Do all lenders offer recasts?
No. Many do, but government-backed loans may be ineligible.