Do all lenders allow recasting?

No. Many conventional loans allow it, but FHA/VA and some investors prohibit it. Confirm with your servicer before sending a lump sum.

Will recasting shorten my term?

No. Payments go down but the schedule length stays the same. If you want a shorter payoff, continue making the old higher payment after the recast.

Is recasting better than refinancing?

If your current rate is lower than market and you just want a smaller payment, recasting usually wins on cost. If market rates are lower, compare refinance closing costs against interest saved.

Does this include PMI or escrow?

This calculator is P&I only. If your lump sum drops you below PMI thresholds, your real monthly savings could be higher once PMI is removed.

Can I recast multiple times?

Some servicers allow multiple recasts, others limit frequency or total number. Check policy and any repeat fees before planning staged lump sums.

Does biweekly or extra principal still help after a recast?

Yes. Recasting lowers the scheduled payment; any extra you continue sending accelerates payoff beyond the modeled schedule.

Will recasting change my amortization schedule dates?

The maturity date stays the same, but the interest/principal split per payment adjusts. Your statements will show a new amortization with lower P&I each month.

finance calculator

Mortgage Recast Savings

See how a lump-sum recast lowers your monthly payment and total interest on your existing mortgage.

Results

Current monthly payment (P&I): $1,933
New monthly payment after recast: $1,611
Payment change: -$322
Total interest (current path): $279,871
Total interest (after recast): $233,226
Interest saved: $46,645

Overview

Estimate how a lump-sum mortgage recast lowers your monthly payment and total interest while keeping your existing loan, rate, and term intact—useful when you have windfall cash but don’t want a refinance.

Instead of replacing your mortgage with a brand‑new loan (and paying full closing costs), a recast keeps your current note in place and simply re‑amortizes the remaining balance after you make a large principal payment. That means the interest rate and maturity date stay the same, but your scheduled principal‑and‑interest payment drops because there is less principal to spread over the remaining term. This calculator surfaces that tradeoff so you can see how much payment relief and interest savings a lump sum might buy you compared with doing nothing or pursuing a full refinance.

How to use this calculator

Enter your remaining loan balance, APR, and the number of months left on your current mortgage term (for example, 300 for 25 years remaining on a 30‑year loan).
Add the lump‑sum recast amount you can apply directly to principal—this could be from a bonus, inheritance, stock sale, or home sale proceeds.
Review the new monthly principal‑and‑interest payment, the monthly drop versus your current payment, and total interest saved over the remaining term.
Experiment with different lump‑sum sizes to see how quickly diminishing returns set in as payments approach a comfortable level.
Compare the outcome to refinance options if current market rates are meaningfully lower than your existing rate, taking into account closing costs and any reset of your loan term.

Inputs explained

Remaining balance: Current unpaid principal on your mortgage based on your latest statement. Exclude any escrow balances for taxes and insurance; the calculator is focused on principal only.
Interest rate (APR %): Your current mortgage APR. A recast keeps this rate the same; only the payment changes because the principal is reduced and re‑spread over the remaining term.
Months remaining: How many scheduled payments are left on your term (for example, 300 for 25 years remaining on a 30‑year mortgage). You can find this by checking your original amortization schedule or asking your servicer.
Lump-sum recast payment: Cash you will apply directly to principal before the recast. Many servicers require a minimum lump sum and may charge a small recast fee; this input should reflect the principal portion you’re comfortable parting with.

How it works

Calculates your current principal‑and‑interest payment based on the remaining balance, APR, and months left on the loan, using the standard mortgage payment formula.

Applies the lump‑sum recast directly to principal, then recalculates the new payment over the same remaining term and rate, effectively lowering the monthly obligation while keeping the payoff date unchanged.

Computes total interest over the remaining life of the loan under the original schedule and under the recast schedule, then reports interest saved as the difference between those two amounts.

Displays the change in monthly payment so you can weigh steady cash‑flow relief against the opportunity cost of locking a lump sum into home equity instead of investing or using it elsewhere.

Formula

Payment = P × r × (1 + r)^n / ((1 + r)^n − 1), where P is principal, r is monthly rate, n is months. New payment uses (P − lump sum) as principal with same r and n. Interest saved = (old payment × n − P) − (new payment × n − (P − lump sum)).

When to use it

You sold a previous home and want to apply part of the proceeds to reduce payments on your new mortgage without going through a full refinance.
You received a bonus, inheritance, or RSU sale and want lower monthly obligations while keeping an attractive existing interest rate.
Current market mortgage rates are higher than your locked‑in rate, so a recast is a cheaper way to reduce payments than refinancing into a more expensive loan.
You plan to boost cash flow for daycare, college savings, early retirement, or a business venture by lowering fixed housing costs while staying in the same home.
You want to drop your debt‑to‑income ratio ahead of another loan application (such as a second home, rental property, or refinance) without changing your first‑mortgage rate and term.

Tips & cautions

Ask your servicer about recast fees (often $100–$500) and minimum lump sums; add that fee mentally to your cash outlay.
If you are close to paying off the loan, check if prepayment alone meets your goals; recasting mainly helps payment size, not payoff speed.
Run a refinance comparison if market rates are lower—recasting keeps your rate, refinancing might cut it further but includes closing costs.
If you have PMI, confirm whether the lump sum helps you cross the 80% LTV threshold and when PMI could be removed.
Keep an emergency fund; don’t drain all liquidity just to reduce a payment if it leaves you exposed to shocks.
Model smaller lump sums too—there is diminishing marginal benefit once payments drop to a comfortable level.
If you plan to move soon, a recast may not pay off; weigh the upfront lump sum against expected holding period.
Excludes taxes, insurance, PMI, and escrow—this is principal-and-interest only.
Assumes fixed-rate loan and fixed remaining term; does not model ARM resets or interest-only periods.
Ignores time value of money; it’s a straight interest comparison, not a discounted cash flow.
Does not include recast fees or closing costs; add them to your mental breakeven.
Assumes the servicer allows recasting; some lenders or investor guidelines prohibit it.

Worked examples

Mid-term recast for cash flow

Balance: $300,000, Rate: 6%, Term left: 300 months, Lump sum: $40,000.
Old payment ≈ $1,799. New payment after recast ≈ $1,559.
Monthly drop ≈ $240; interest saved ≈ $32,000 over the remaining term.

Small lump sum, modest effect

Balance: $250,000, Rate: 5.25%, Term left: 240 months, Lump sum: $10,000.
Old payment ≈ $1,680. New payment ≈ $1,613.
Monthly drop ≈ $67; interest saved ≈ $6,500. Good for minor cash-flow relief.

PMI removal catalyst

Balance: $350,000 on a $410,000 home (~85% LTV). Rate: 6.5%. Term left: 320 months. Lump sum: $40,000.
New balance $310,000 pushes LTV near 76%—eligible for PMI removal (not modeled), and payment drops from ~$2,208 to ~$1,956.
Monthly drop ≈ $252 plus potential PMI cancellation makes total monthly savings larger than shown here.

Compare to refinance

Balance: $420,000, Rate: 3.25% (great rate). Term left: 320 months. Lump sum: $60,000.
Old payment ≈ $2,151. New payment ≈ $1,843. Monthly drop ≈ $308; interest saved ≈ $69,000.
Refinancing to today’s higher rates would raise the rate, so recast wins by keeping the low APR.

Late-stage loan, smaller impact

Balance: $90,000, Rate: 4.5%, Term left: 70 months, Lump sum: $20,000.
Old payment ≈ $1,312. New payment ≈ $1,020. Monthly drop ≈ $292; interest saved ≈ $2,700.
Near the end of a loan, payment relief is still real but total interest saved is smaller because few interest-heavy years remain.

Deep dive

Use this mortgage recast calculator to see how a lump-sum payment lowers your monthly P&I without refinancing.

Enter balance, APR, months remaining, and the lump sum to view your new payment, payment reduction, and interest saved.

Compare recasting vs refinancing when current rates are higher than your locked rate.

Model how bonus cash, sale proceeds, or RSU liquidity can cut your mortgage bill while keeping your existing loan.

Test different lump sums to balance liquidity needs against cash-flow relief and long-term interest savings.

Check whether a recast plus PMI removal produces the payment drop you need without triggering refinance closing costs.

If you expect to move in a few years, test whether the lump sum’s interest savings outweigh keeping cash invested elsewhere.

FAQs

Do all lenders allow recasting?: No. Many conventional loans allow it, but FHA/VA and some investors prohibit it. Confirm with your servicer before sending a lump sum.
Will recasting shorten my term?: No. Payments go down but the schedule length stays the same. If you want a shorter payoff, continue making the old higher payment after the recast.
Is recasting better than refinancing?: If your current rate is lower than market and you just want a smaller payment, recasting usually wins on cost. If market rates are lower, compare refinance closing costs against interest saved.
Does this include PMI or escrow?: This calculator is P&I only. If your lump sum drops you below PMI thresholds, your real monthly savings could be higher once PMI is removed.
Can I recast multiple times?: Some servicers allow multiple recasts, others limit frequency or total number. Check policy and any repeat fees before planning staged lump sums.
Does biweekly or extra principal still help after a recast?: Yes. Recasting lowers the scheduled payment; any extra you continue sending accelerates payoff beyond the modeled schedule.
Will recasting change my amortization schedule dates?: The maturity date stays the same, but the interest/principal split per payment adjusts. Your statements will show a new amortization with lower P&I each month.

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This is a simplified P&I recast estimator. It ignores PMI, taxes, insurance, and time value of money, and assumes your servicer permits recasting at the stated rate and term. Confirm fees, eligibility, and PMI rules with your lender before proceeding. Maintain adequate emergency savings before committing large lump sums.