Mortgage Recast vs Refinance Calculator

Compare your options and find the best path to lower monthly payments

Educational only — not financial advice
Loan Details

Current Loan

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Recast Options

$
$
%
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Estimated: $8,750

Results Summary

Baseline Payment
$2,622
Recast Payment
$2,294
$328 savings/month
Refinance Payment
$2,043
$580 savings/month
Break-even (Refi vs Baseline)
1 year, 4 months
Time until refinance savings offset closing costs.

Comparison Summary

Baseline: Your current loan maintains a monthly payment of $2,622.

Recast: By making a lump-sum payment of $50,000 (plus a $300 fee), your monthly payment drops to $2,294—a savings of $328 per month.

Refinance: With a new 5.75% rate, your payment would be $2,043. The break-even point is 1 year, 4 months (when your monthly savings offset the closing costs).

Explore Your Options

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Detailed Comparison

Metric Baseline Recast Refinance
Monthly Payment$2,622$2,294$2,043
Monthly Savings$0$328$580
Upfront Cash$0$50,300$58,750
Total Interest$449,599$393,399$385,302
Total Cost$849,599$793,699$794,052
Payoff Time27 years27 years30 years
Break-even (vs Baseline)N/A1 month1 year, 4 months

Total Cost is the total loan payments and fees, excluding the lump-sum principal payment.

Visual Comparison

Remaining Balance Over Time

060120180240300360$0$80K$160K$240K$320K$400K Months Balance
Baseline (Current)
Recast
Refinance

This chart shows how the remaining loan balance decreases over time. The baseline scenario shows the current loan, the recast shows lower balance from lump sum payment, and refinance shows the new loan trajectory.

Understanding Your Options

What is a Mortgage Recast?

A mortgage recast (or re-amortization) allows you to make a large lump-sum principal payment and have your lender recalculate your monthly payment based on the lower balance. Your interest rate and term remain unchanged, but your required monthly payment decreases. This typically costs $150–$500.

What is Refinancing?

Refinancing means taking out an entirely new loan to replace your existing mortgage. You can change your interest rate, loan term, or both. While closing costs are higher (typically 2–5% of the loan amount), refinancing can provide significant long-term savings if rates have dropped substantially.

When Recast Tends to Win

  • Your current rate is competitive or better than market rates
  • You have a lump sum to put toward principal
  • You want minimal fees and closing costs
  • You're happy with your current loan term
  • You have a conventional loan (not FHA/VA/USDA)

When Refinance Tends to Win

  • Current market rates are significantly lower than your rate
  • You want to change your loan term (e.g., 30-year to 15-year)
  • You want to switch loan types (ARM to fixed, etc.)
  • Long-term interest savings outweigh upfront costs
  • You plan to stay in the home past the break-even point

Eligibility & Assumptions

Recast eligibility: Most conventional loans allow recasting. FHA, VA, USDA, and some jumbo loans typically do not. Minimum lump-sum requirements vary by lender (often $5,000–$10,000).

Assumptions: Calculations assume fixed-rate mortgages with standard amortization. Property taxes, insurance, and HOA fees are not included. Results are estimates for educational purposes only.

Important: Always verify calculations and fees with your lender. This tool does not account for prepayment penalties, adjustable rates, or other special loan features.

Frequently Asked Questions

What is a mortgage recast?
A mortgage recast (also called re-amortization) is when you make a large lump-sum payment toward your loan principal, and your lender recalculates your monthly payment based on the new, lower balance. Your interest rate and loan term remain the same, but your monthly payment decreases. Most lenders charge a small fee (typically $150–$500) and require a minimum lump-sum payment for this service.
How is a recast different from refinancing?
Recasting keeps your existing loan—same rate, same term—but lowers your payment after a lump sum payment. Refinancing replaces your entire loan with a new one, potentially with a different rate, term, and closing costs. Recasting is much cheaper (typically under $500) while refinancing can cost thousands in closing costs.
Which loans allow recasting?
Most conventional loans from banks and credit unions allow recasting. However, FHA, VA, USDA, and many jumbo loans typically do not offer recast options. Contact your loan servicer to confirm eligibility—policies vary by lender.
When does recasting make more sense than refinancing?
Recasting tends to be better when: (1) your current interest rate is already competitive or better than current market rates, (2) you have a lump sum to put toward principal, (3) you want to lower monthly payments with minimal fees, and (4) you don't want to extend your loan term.
When does refinancing make more sense than recasting?
Refinancing tends to be better when: (1) current market rates are significantly lower than your existing rate, (2) you want to change your loan term (e.g., switch from 30-year to 15-year), (3) you want to switch loan types (e.g., ARM to fixed), or (4) the long-term interest savings outweigh the closing costs despite the upfront expense.
Can I do both—recast AND refinance?
Not on the same loan at the same time. However, you could recast your current loan now, then refinance later if rates drop further. Or you could refinance to a new loan and then recast that new loan after making a lump sum payment (if the new lender allows recasting). The calculator helps you compare these scenarios separately.
How accurate are these calculations?
The calculations use standard amortization formulas and should match your lender's numbers closely. However, this tool provides estimates for educational purposes only. Actual results may vary based on your specific loan terms, lender policies, fees, and other factors. Always verify with your lender before making financial decisions.
What are the assumptions used in this calculator?
This calculator assumes: (1) fixed-rate mortgages (not ARMs), (2) monthly payment frequency, (3) standard amortization with no prepayment penalties, (4) closing costs are either paid upfront or rolled into the loan, (5) no changes to property taxes, insurance, or HOA fees (which aren't included in these calculations), and (6) no adjustable-rate resets or prepayment penalties unless specified.
Should I use this calculator to make my decision?
This calculator is an educational tool to help you understand the financial implications of recasting vs refinancing. It is NOT financial advice. You should consult with a licensed financial advisor or mortgage professional who can review your complete financial situation before making any decisions.