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

How to use this calculator

Enter your remaining loan balance, APR, and months left.
Add the lump-sum recast amount you can apply to principal.
Review the new monthly payment, the drop vs your current payment, and total interest saved.
Try different lump-sum sizes to see the best mix of cash use vs payment relief.
Compare the outcome to refinance options if you also have access to lower rates.

Inputs explained

Remaining balance: Current unpaid principal on your mortgage.
Interest rate (APR %): Your current mortgage APR; recasts keep this rate.
Months remaining: How many scheduled payments are left on your term (e.g., 300 for 25 years remaining).
Lump-sum recast payment: Cash you will apply to principal; the servicer then re-amortizes the loan.

How it works

Calculates your current principal-and-interest payment based on the remaining balance, APR, and months left.

Applies the lump-sum recast directly to principal, then recalculates the new payment over the same remaining term and rate.

Interest saved compares total interest on the original path vs the recast path; payment change shows the monthly drop.

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 proceeds to reduce payments without refinancing.
You received a bonus, inheritance, or RSU sale and want lower monthly obligations while keeping your current rate.
Rates today are higher than your existing mortgage, so a recast is cheaper than refinancing.
You plan to boost cash flow for daycare, college savings, or early retirement by lowering fixed housing costs.
You want to drop debt-to-income ratio ahead of another loan application without a full refinance.

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.