Mortgage payments are a significant part of monthly budgets. But what if you could lower your monthly payment without refinancing, credit checks, or restarting your loan? That’s where the Recast Mortgage Calculator comes in—a simple, powerful tool that shows the impact of a lump-sum payment on your mortgage balance and monthly payment.
Mortgage Recast Calculator
📘 What Is a Mortgage Recast?
A mortgage recast (also called reamortization) is when your lender recalculates your monthly mortgage payment based on a new, lower principal balance after you make a lump-sum payment. It does not change your interest rate or loan term—you simply pay less each month because you're now borrowing less.
🔑 Key Benefits:
- ✅ Lower monthly payment
- ✅ Save on long-term interest
- ✅ Keep current interest rate
- ✅ No need to refinance
- ✅ No credit check or income verification
- ✅ Minimal lender fees (typically $150–$500)
🛠️ How to Use the Recast Mortgage Calculator
Using our calculator is quick and easy. Follow these steps:
✅ Step-by-Step Guide:
- Enter Original Loan Amount
(e.g., $300,000) - Input Interest Rate
(e.g., 5.0%) - Select Loan Term
(15, 20, or 30 years) - Enter Current Remaining Balance
(This can be found on your mortgage statement.) - Enter Remaining Loan Term in Months or Years
(How many payments are left?) - Input Lump-Sum Payment Amount
(The amount you plan to apply toward the loan.) - Click "Calculate"
📊 You’ll See:
- Your new monthly payment
- Interest saved over the life of the loan
- Optional time savings if continuing original payments
- New amortization details
📐 Recast Mortgage Formulas (Plain Text)
1. New Loan Balance After Lump-Sum:
New Principal = Current Balance – Lump-Sum Payment
2. New Monthly Payment:
P = [r × New Principal] / [1 – (1 + r)^–n]
Where:
- P = New monthly payment
- r = Monthly interest rate (annual rate ÷ 12)
- n = Number of months remaining
3. Interest Saved:
Interest Saved = Total Interest Before – Total Interest After Recast
📊 Example Calculation
Let’s say:
- Original Loan: $300,000
- Interest Rate: 5%
- Loan Term: 30 years
- Current Balance: $240,000
- Remaining Term: 25 years
- Lump-Sum Payment: $40,000
✅ Results:
- New Balance: $200,000
- Original Monthly Payment: ~$1,610
- New Monthly Payment After Recast: ~$1,341
- Monthly Savings: $269
- Interest Saved: Over $25,000 across loan term
🔁 Recast vs Refinance: What’s the Difference?
| Feature | Recast | Refinance |
|---|---|---|
| Interest Rate Change | ❌ No | ✅ Yes |
| Loan Term Change | ❌ No | ✅ Optional |
| Monthly Payment Drop | ✅ Yes | ✅ Yes |
| Credit Check Needed | ❌ No | ✅ Yes |
| Closing Costs | 💵 $150–$500 | 💵 $3,000–$7,000 |
| Keeps Original Loan | ✅ Yes | ❌ New loan initiated |
💡 When to Use a Recast Mortgage Calculator
Use this tool when:
- You receive a bonus, inheritance, or tax refund
- You sell another property and want to invest proceeds
- You want to lower monthly obligations without refinancing
- You're locked into a favorable interest rate and don't want to refinance
- You want to increase monthly cash flow
🧾 Recast Eligibility: Check Before You Act
While recasting is useful, not all loans or lenders allow it.
✅ Allowed on:
- Conventional loans
- Fixed-rate mortgages
❌ Not allowed on:
- FHA, USDA, or VA loans
- Jumbo loans (in some cases)
📞 Always check your lender’s recast policy. Some have minimum lump-sum requirements (often $5,000+) and may charge a small fee.
📈 Advanced Tip: Continue Paying Your Original Monthly Payment
If you continue paying your original higher monthly payment after recasting, you’ll pay off your mortgage faster and save even more interest. This is a smart strategy if your income is stable but you want flexibility.
🧾 20 Frequently Asked Questions (FAQs)
1. What is a mortgage recast?
A mortgage recast recalculates your loan payments based on a lower principal after a lump-sum payment.
2. Does a recast change your interest rate?
No. Your interest rate remains the same.
3. Is a recast the same as refinancing?
No. Recasting is cheaper and doesn't involve a new loan.
4. Does recasting hurt your credit score?
No. There's no credit inquiry or new loan involved.
5. How much does a mortgage recast cost?
Typically $150–$500, depending on the lender.
6. Can I recast an FHA or VA loan?
Usually not. These loans don’t support recasting.
7. Is there a minimum lump-sum to recast?
Yes. Most lenders require at least $5,000–$10,000.
8. How often can I recast my loan?
Typically once, but some lenders may allow more. Confirm with your servicer.
9. What happens to my escrow account?
Escrow payments for taxes and insurance stay the same.
10. Does recasting reduce the loan term?
No, but you can still pay off early if you continue paying more than required.
11. Does recasting save on interest?
Yes, because you're paying interest on a smaller principal.
12. Can I use the calculator without a lump sum?
No—recasting only applies when reducing the balance via lump-sum.
13. Can I use proceeds from a home sale for recasting?
Yes, this is one of the most common uses.
14. Is the new monthly payment fixed?
Yes, unless you have an adjustable-rate mortgage (ARM).
15. Can I recast a second home mortgage?
Yes, if allowed by your lender.
16. Is recasting a good idea in a rising interest rate market?
Yes—especially if you want to keep your current low rate and reduce payments.
17. Does recasting delay my next mortgage payment?
No, your payment schedule continues without interruption.
18. Can recasting be done online or must I contact the lender?
Typically, you must submit a formal request to your lender.
19. Can you reverse a recast?
No. Once processed, it becomes the new loan structure.
20. Is the Recast Mortgage Calculator free?
Yes! It’s completely free and available anytime.
🧠 Final Thoughts
The Recast Mortgage Calculator is an incredibly useful tool for homeowners who want to reduce monthly mortgage payments, save interest, and retain their current interest rate—all without the hassle of refinancing. With just a few inputs, you can see how a lump-sum payment changes your financial picture instantly.