Reference formulas and worked examples below keep their stated units. Monetary examples use USD; dimensional examples use US customary units unless labeled otherwise. Metric calculator inputs are converted to these reference units before calculation. Choosing another currency does not convert example amounts or exchange money.
How to use this mortgage recast calculator
Current principal balance: Enter the unpaid principal from your latest mortgage statement, not the original loan amount. Exclude escrow, interest due and fees.
Principal payment now: Enter the lump sum you will apply to principal. The calculator uses it in both paths, and it cannot exceed the current balance.
Annual interest rate + Remaining term: Use your existing annual interest rate and the time left on the loan. Select months or years. A recast keeps this rate and remaining term; a refinance replaces the loan with new terms.
Cash recast fee: Open Cash recast fee and enter the amount quoted by your servicer, including zero if there is no fee. The fee is paid upfront only in the recast path; it is not added to the loan balance.
Optionally open Extra monthly principal to add a recurring payment to the keep-payment path only; leave it at 0 for the original comparison. Read the conclusion and the two columns for monthly payments, interest, payoff time and total cash. Expand the principal-and-interest charts or the monthly comparison, then use Download breakdown (CSV) to save both schedules and their assumptions.
How the calculation works
First reconstruct the current scheduled payment from the balance, fixed rate and remaining term. Subtract the same immediate principal lump sum for both comparison paths.
Recast path: calculate a new scheduled payment for the reduced balance over the original remaining term at the same rate. Keep-payment path: pay the old scheduled payment plus any optional extra monthly principal, starting in month 1, until the smaller balance is repaid.
Monthly interest and payments are rounded to cents. A final payment is capped at the amount due and adjusted at the stated final month to clear a cent-rounding remainder.
Total cash for recast = lump sum + cash recast fee + remaining recast payments. Total cash without recast = the same lump sum + actual keep-payment installments, including optional extra principal. Their difference includes the fee and any extra interest from paying principal down more slowly.
Worked example
At 0%, a 120,000 balance with 120 months left has a 1,000 payment. Paying 24,000 now leaves 96,000. Recasting it over 120 months lowers the payment to 800. Keeping the 1,000 payment clears it in 96 months. With a 250 cash recast fee, recasting costs 120,250 in total cash versus 120,000 for the extra-payment-only path; both have zero interest.
Recast vs refinance: which one lowers your payment more?
A mortgage recast lowers the required principal-and-interest payment after a principal reduction while keeping your current rate and remaining term. Refinancing replaces the mortgage: the new rate, term and any financed fees determine the new payment. Neither option always produces the lower payment.
Compare the same balance after any lump sum and the same remaining term first. At a lower refinance rate, that equal-balance, equal-term payment is lower; at a higher rate, it is higher. Extending a refinance term can also reduce the payment, but spreads repayment over more months and can increase total interest.
Example in USD: a $250,000 balance, a $50,000 lump sum and 20 years remaining leave $200,000 to repay. A recast at the existing 6% rate gives about $1,432.86 per month. A hypothetical refinance of that same $200,000 at 5% over 20 years gives about $1,319.91, before any financed fees. These are principal-and-interest amounts, not lender quotes.
Then compare costs. Use your servicer’s recast fee and the refinance Loan Estimate, including points, lender charges and closing services. A recast fee is not always required; Bank of America currently lists no recast fee. Use the quoted costs for your own loans instead of a fixed fee or closing-cost percentage.
For an illustrative $250 cash recast fee versus $4,000 in cash refinance costs, refinancing costs $3,750 more upfront. Using the payments above, $3,750 ÷ ($1,432.86 − $1,319.91) ≈ 33.2 months of payment savings. This is a simple cash-flow comparison, not a total-cost break-even: also compare remaining loan balances and how long you expect to keep the loan.
The live comparison above answers a separate question: recast or keep paying the original amount after the same lump sum, with optional extra monthly principal in the keep-payment path. Extra cost to recast = cash recast fee + interest with recast − interest keeping payment. To evaluate a refinance offer, use the separate calculator below with the quoted rate, costs and holding period.
Compare a mortgage refinance offer, costs and holding period
Limits and assumptions
This is a fixed monthly model with interest rounded to cents. Daily balance calculations, payment dates, changing rates, promotions, taxes and jurisdiction-specific contract rules are not inferred. This is a hypothetical eligible recast, not an approval check. No servicing minimums, eligibility rules, refinancing, rate changes, escrow adjustment, PMI cancellation, prepayment penalties or tax effects are inferred. The old payment is reconstructed; an actual lender’s current payment can differ. A full-balance lump sum pays off the loan rather than requiring a recast.
Frequently asked questions
How is recasting different from refinancing?
This model keeps the existing rate and remaining term and changes the payment after principal is reduced. Refinancing replaces the loan and can change its rate, term and costs.
Why compare the same lump sum without recasting?
It separates the benefit of reducing principal from the additional choice to lower the required payment. Keeping the larger payment usually clears the debt sooner.
Will the tax and insurance payment decrease?
Not automatically. Results here are principal and interest; property tax, insurance and other ownership costs are separate.
How much does a mortgage recast cost?
Ask your servicer for its fee before sending the lump sum. Some charge a fee; Bank of America lists no recast fee as of October 20, 2026. The 250 shown in this tool is an editable example, not a market quote. Your principal payment reduces debt and is separate from the fee.
Does recasting a mortgage lower my payment?
For an eligible loan with a positive principal reduction, the same fixed rate and the same remaining term, the principal-and-interest payment decreases, subject to rounding. A zero lump sum does not lower it. Taxes and insurance do not automatically decrease. Recasting is not automatic: confirm approval and the effective payment date with your servicer.
What are the mortgage recast requirements? Can FHA or VA loans be recast?
Eligibility, minimum principal reduction, payment history and timing depend on the servicer and investor. Chase lists FHA, VA and USDA loans as ineligible for its standard recast option. As one lender-specific example, Bank of America requires six months of payments, a current loan, at least $5,000 in principal curtailments over six months and no recast in the previous 12 months. These are not universal rules. Confirm the requirements for your own loan before paying.
What if the lump sum pays the entire balance?
Both paths have no remaining loan payments. Any recast fee still entered is shown as an extra cash cost; paying off a loan normally makes a recast unnecessary.
References
Fannie Mae: principal curtailment and recasting over the remaining term
Chase: recast vs refinance and loan eligibility
Bank of America: recast fees and eligibility (checked October 20, 2026)