Mortgage Recast Calculator
Recasting keeps your interest rate and loan end date the same, but lowers the payment by making a lump-sum principal payment. Enter your current balance, APR, remaining term, and the lump sum you’ll pay.
APR / 12 / 100.
Result
Current Monthly Payment (M₀)
New Monthly Payment (M₁)
Payment Change
Remaining Interest (No Recast)
Remaining Interest (After Recast)
Estimated Interest Saved
Net Savings After Fee
Simple Payback Period
Fee / (M₀ − M₁).
- Recasting keeps your interest rate and maturity date; it just lowers the payment by reducing principal.
- The lump-sum payment immediately cuts principal; the fee does not reduce principal (it’s an extra cost).
- “Interest saved” is an estimate versus continuing with no recast, assuming the rate and term stay the same.
- If your APR is 0%, payments are simply principal ÷ months; interest saved equals the lump sum (since there’s no interest).
- This is an educational estimate; lender policies and amortization timing conventions can vary.
What is a Mortgage Recast Calculator?
A Mortgage Recast Calculator shows how a one-time principal prepayment (lump sum) lowers your monthly payment without changing your interest rate or loan term. Unlike a refinance, a recast keeps your existing loan and simply re-amortizes the remaining balance over the remaining months. This is useful after receiving cash windfalls (bonuses, inheritance, home sale proceeds) or when you want to reduce cash flow pressure while avoiding the closing costs and underwriting of a refinance. The calculator reveals your new payment, projected interest saved over the remaining life of the loan, and a breakeven period versus any lender recast fee.
About the Mortgage Recast Calculator
The tool uses standard amortization math. Let original principal \(\mathrm{PV}\), annual percentage rate \(\mathrm{APR}\), monthly rate \(r=\mathrm{APR}/12\), and total term \(N\) (in months). Your original payment is
After \(k\) payments, the remaining balance is
If you make a lump-sum prepayment \(L\) at month \(k\), the new balance is \(B_k' = B_k - L\). The loan is then re-amortized over the remaining \(N-k\) months at the same rate:
Monthly reduction \(\Delta=\mathrm{Pmt}-\mathrm{Pmt}_{\text{new}}\). Interest remaining on the original schedule:
Interest saved \(\approx \text{Int}_{\text{remain}}-\text{Int}_{\text{recast}}\). If your lender charges a fee \(F\), a quick breakeven in months is \(F/\Delta\). Render these formulas responsively with MathJax; use math.js to evaluate the same equations numerically.
How to Use this Mortgage Recast Calculator
- Enter original loan amount \(\mathrm{PV}\), APR, and term \(N\) (months or years × 12).
- Enter how many payments you’ve already made \(k\) and the planned lump sum \(L\).
- The calculator computes \(r\), \(\mathrm{Pmt}\), \(B_k\), updated balance \(B_k'\), and the new payment \(\mathrm{Pmt}_{\text{new}}\).
- Optionally add a recast fee \(F\); view payment drop \(\Delta\), interest saved, and breakeven \(F/\Delta\).
Examples (using the same formulas)
Example 1 — Payment drop and breakeven:
\(\mathrm{PV}=100{,}000,\ \mathrm{APR}=6\%\Rightarrow r=0.005,\ N=120.\) Original payment
$$\mathrm{Pmt}=\frac{0.005\cdot 100{,}000}{1-(1.005)^{-120}}\approx \$1{,}109.76.$$
After \(k=24\) months:
$$B_{24}=100{,}000(1.005)^{24}-1{,}109.76\frac{(1.005)^{24}-1}{0.005}\approx \$84{,}476.$$
Lump sum \(L=\$10{,}000\Rightarrow B_{24}'\approx \$74{,}476.\) New payment over \(N-k=96\) months:
$$\mathrm{Pmt}_{\text{new}}=\frac{0.005\cdot 74{,}476}{1-(1.005)^{-96}}\approx \$978.70.$$
Drop \(\Delta\approx \$131.06.\) With fee \(F=\$250\), breakeven \(\approx 250/131.06\approx 2\) months.
Example 2 — Interest saved (remaining horizon):
Interest remaining if not recast:
$$\text{Int}_{\text{remain}}=\mathrm{Pmt}\cdot 96 - B_{24}\approx 1{,}109.76\cdot 96-84{,}476\approx \$22{,}061.$$
After recast:
$$\text{Int}_{\text{recast}}=\mathrm{Pmt}_{\text{new}}\cdot 96 - B_{24}'\approx 978.70\cdot 96-74{,}476\approx \$19{,}479.$$
Estimated interest saved \(\approx \$2{,}582\) (net \(\approx \$2{,}332\) after a \$250 fee).
8 FAQs
Q1: What’s the difference between recast and refinance?
A recast keeps your loan and rate; it re-amortizes after a lump sum. A refinance replaces the loan and rate.
Q2: Does a recast change my interest rate or term?
No. It lowers the payment by reducing principal; the contractual rate and maturity stay the same.
Q3: Can FHA, VA, or jumbo loans be recast?
Availability varies by lender/investor. Many conventional loans allow recasts; government-backed loans often do not.
Q4: Is there a minimum lump sum?
Lenders commonly require a minimum (e.g., \$5,000–\$10,000) and charge a small administrative fee.
Q5: Will a recast change my escrow or PMI?
Escrow targets may update independently. PMI could end earlier if your new LTV crosses the cancellation threshold.
Q6: Can I shorten the term instead of lowering the payment?
A recast targets payment reduction. To shorten term, keep paying the old amount or consider refinancing to a shorter term.
Q7: When is recasting better than refinancing?
When your current rate is competitive and you want a lower payment without closing costs, credit checks, or a new rate.
Q8: How often can I recast?
Policies vary. Some lenders allow multiple recasts after additional lump sums; confirm limits and fees beforehand.