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What a recast calculator shows
People who receive a large sum, from a home sale, a bonus or an inheritance, face a fork with their mortgage. Paying down principal is the obvious move; the less obvious part is what to do with the payment afterward. A recast lets you lower it without touching your rate. This calculator puts the recast next to the alternative of keeping the old payment, so the trade is visible in dollars.
How it works
Enter your balance, rate, years remaining and the lump sum you plan to pay. The calculator subtracts the lump sum from the balance and recomputes the payment over the same remaining years at the same rate. Then it runs the other path, where you make the same lump-sum payment but keep sending your old payment, and compares total interest and payoff date.
How the recast payment is calculated
It uses the standard formula with a smaller balance: new payment = (balance − lump sum) × r ÷ (1 − (1 + r)−n), where r is your monthly rate and n is the remaining months. Because r and n are unchanged, the payment falls in proportion to the balance.
Worked example: $320,000 at 5.5%, 27 years left, $50,000 lump sum
Today's payment is $1,898.04. After a $50,000 payment the balance is $270,000 and the recast payment is $1,601.47, about $297 a month less. Interest over the rest of the loan is roughly $248,876.
If you paid the same $50,000 but kept sending $1,898.04, the loan would be done 7 years 9 months sooner and interest would be roughly $168,111, about $80,765 lower. The recast buys monthly breathing room; keeping the payment buys a much earlier finish. The right choice depends on what your budget needs.
Things to check
Eligibility depends on the servicer
Conventional loans are the main candidates. Government-backed loans usually cannot be recast, and even for conventional loans the option is up to the servicer. Confirm the minimum lump sum and the fee before you commit funds.
Compare it with refinancing
If today's rates are lower than yours, a refinance may cut the payment and the rate, but with full closing costs. Test that on the refinance calculator. If your rate is already low, a recast keeps it.
Consider what else the cash could do
Money used for a lump sum is no longer liquid. Keep an emergency fund, then look at the trade with the payoff calculator. If you are buying your next home and want to know how much loan you can carry, start with the main mortgage calculator.
Estimate only. Your servicer will confirm the recast payment.
Frequently asked questions
What is a mortgage recast?
A recast, also called re-amortization, is when you make a large lump-sum payment toward principal and your lender recalculates the monthly payment on the smaller balance. Your interest rate and payoff date stay exactly the same. Only the payment drops.
Is a recast cheaper than a refinance?
Usually yes. Lenders typically charge a modest administrative fee, often a few hundred dollars, and do not require a new appraisal or a credit check. A refinance carries full closing costs and replaces your rate, which is only a good idea if the new rate is lower than yours.
Which loans can be recast?
Conventional loans are the most common candidates, and it is up to the servicer. FHA, VA and USDA loans generally cannot be recast, and some servicers do not offer the option at all, so call yours before you plan around it.
How much do I need to pay to recast?
Servicers often set a minimum lump sum, commonly in the thousands of dollars, and may require your loan to be current. The bigger the lump sum, the larger the payment drop. Ask your servicer for their minimum and their fee.
Should I recast or just keep paying the same amount?
It depends on your goal. Recasting frees up monthly cash flow. Keeping the old payment after the lump sum ends the loan earlier and saves more interest overall. The result panel shows both so you can compare, using your own numbers.
When does a recast make the most sense?
A common case is a homeowner who sells one house, buys another, and puts the sale proceeds toward the new mortgage. It also fits someone with an inheritance or a bonus who has a rate they want to keep, such as a low pandemic-era rate.