Mortgage Recast Calculator
A mortgage recast, also called a re-amortisation, is a feature offered by many conventional loan servicers that allows you to make a large lump-sum payment toward your principal balance and have the remaining balance re-amortised over the original remaining loan term at the same interest rate. Unlike refinancing, a recast does not change your interest rate, does not require a new application, and typically involves only a small administrative fee of $150 to $500. The result is a lower monthly payment because the outstanding balance has been reduced while the loan term stays the same. The break-even analysis is simple: divide the recast fee by the monthly payment reduction to find how many months it takes for the interest savings to cover the fee. Recasts are not available on FHA, VA, or USDA loans, only on conventional loans serviced by lenders who offer the feature and only when the servicer approves the request. The minimum lump-sum payment required to trigger a recast varies by lender, commonly $5,000 or more. This calculator takes your current remaining balance, interest rate, remaining term, and proposed lump-sum payment, computes the new amortised monthly payment after the recast, shows the monthly saving, calculates the total interest saved over the remaining loan life, and determines the break-even period on the recast fee.
With a lump-sum payment of $50,000, your new monthly payment will be --, saving you -- per month.
How the recast calculation works
A mortgage recast recalculates your monthly payment after you make a lump-sum principal payment. The new payment is found using the standard amortization payment (PMT) formula, applied to the reduced principal and the remaining term.
r = annual rate / 100 / 12
new balance = current balance - lump sum
new monthly = new balance x r x (1 + r)^n / ((1 + r)^n - 1)
where n = remaining months
monthly savings = old payment - new monthly
interest saved = old total interest on remaining term - new total interest on remaining term
break-even months = recast fee / monthly savings
Worked example
Current balance $320,000, payment $2,150, rate 6.5%, 300 months remaining, lump-sum payment $50,000, fee $250:
- r = 6.5 / 100 / 12 = 0.00541667
- New balance = 320,000 - 50,000 = $270,000
- New monthly = 270,000 x 0.00541667 x (1.00541667)^300 / ((1.00541667)^300 - 1) = $1,824.15
- Monthly savings = 2,150 - 1,824.15 = $325.85
- Break-even = 250 / 325.85 = 0.77 months (about 23 days)
- Total interest saved = (old remaining interest on $320,000) - (new remaining interest on $270,000) = approximately $58,000
When to consider a mortgage recast
A recast is most beneficial when you have received a windfall (bonus, inheritance, sale proceeds) and want to reduce your monthly payment without the cost and complexity of refinancing. Key advantages include low fees ($150 to $500), no change to your interest rate, and no new application process. Disadvantages include limited lender availability and the inability to change your loan term or rate.
Compare a recast to refinancing by calculating your break-even point. If refinancing costs $4,000 and saves $200 per month, break-even is 20 months. If a recast costs $250 and saves $325 per month, break-even is less than one month. For borrowers planning to stay in the home beyond the break-even date, a recast is almost always the lower-cost option.
The CFPB provides comprehensive mortgage guidance at consumerfinance.gov/owning-a-home.
Mortgage recast calculator: frequently asked questions
What is a mortgage recast (re-amortization)?
A mortgage recast is a process where a borrower makes a substantial lump-sum principal payment and the lender recalculates the monthly payment over the remaining loan term at the same interest rate. Unlike refinancing, no new loan is created, the rate does not change, and fees are typically modest ($150 to $500). The CFPB explains mortgage recasts at consumerfinance.gov.
How is the new monthly payment calculated after a recast?
The new payment is calculated using the standard amortization formula: New Balance = Old Balance minus Lump Sum Payment. New Monthly Payment = PMT(rate/12, remaining months, new balance). The rate does not change; only the principal is reduced. This new payment applies to the remaining term of the original loan.
What are typical recast fees and when is a recast worthwhile?
Recast fees typically range from $150 to $500 depending on the lender. A recast becomes financially attractive when the monthly savings exceed the fee within a reasonable time frame (called the break-even period). For example, a $250 fee with $100 monthly savings breaks even in about 2.5 months. The CFPB discusses cost-benefit analysis of mortgage modifications at consumerfinance.gov.
How does a mortgage recast differ from refinancing?
In a refinancing, the original loan is paid off and replaced with a new loan, often at a different rate, with new closing costs (typically $3,000 to $6,000) and a new loan term. In a recast, the same loan remains, only the payment is recalculated, and costs are minimal. If rates have fallen, refinancing may offer lower payments; if you are satisfied with your current rate and want to reduce payment via principal reduction, a recast is more efficient.
Can I recast an FHA, VA or USDA loan?
Recast policies vary by loan type and lender. FHA loans have stricter recast guidelines than conventional loans. VA and USDA loans may also have limitations. Contact your loan servicer or review your loan documents to confirm eligibility. The CFPB provides general mortgage modification guidance at consumerfinance.gov/owning-a-home.
What is the break-even period on a recast fee?
The break-even period is the number of months required for your monthly savings to equal the recast fee. The calculator computes this as: Break-Even Months = Recast Fee / Monthly Savings. For example, if your fee is $250 and you save $150 per month, break-even occurs in 1.67 months (about 50 days). If you plan to stay in the home beyond this point, the recast is financially positive.
Official sources
- CFPB: What is a mortgage recast?
- CFPB: Owning a Home resource center.
Reviewed by the CalculatorHub team, edited by James Graham, 13 June 2026. See our methodology. General information, not financial advice.