Your new payment after a lump sum, and what recasting saves
Updated 2026-10-02
A mortgage recast lowers your monthly payment after you pay a lump sum toward principal: the servicer recalculates the payment on the lower balance at the same rate over the months you have left, so the payoff date does not change. Enter your balance, rate, months left and lump sum to see the new payment, the interest saved and how that compares with prepaying without a recast. compare extra payments instead · compare a refinance · see the schedule.
Your loan and lump sum
After the recast
New monthly payment (P&I)
$1,688.02
now $2,025.62
Monthly savings
$337.60
Interest saved (recast)
$51,281
$51,031 after the fee
Prepay without recast: interest saved
$143,646
loan ends 7 years 11 months sooner
Estimates for planning, not a loan offer or financial advice. Every rate and cost here is a number you enter or an example you can change; confirm figures with your lender.
Next step
Paid as extra principal without a recast, the same $50,000 keeps your $2,025.62 payment, ends the loan 7 years 11 months sooner and saves $142,830 of interest. Compare in theextra payment calculator.
A recast (also called re-amortization) keeps your rate and your payoff date. You pay a lump sum toward principal, and the servicer recalculates the level payment on the lower balance over the months that are left, using the same amortization formula as the original loan:
New payment = (balance − lump sum) × r ÷ (1 − (1 + r)−n)
where r is the annual rate ÷ 12 and n is the number of months left. Because the payment is proportional to the balance, the monthly saving equals the payment on the lump sum by itself. The interest saved over the rest of the loan is n × the monthly saving − the lump sum. The formula is the standard fixed-rate payment described by the Consumer Financial Protection Bureau; whether a loan can be recast, the minimum lump sum and the fee are set by your servicer.
Worked example
You owe $300,000 at 6.5% with 25 years (300 months) left. The payment is $2,025.62. You pay $50,000 toward principal and recast for a $250 fee. The new payment on $250,000 over the same 300 months is $1,688.02, $337.60 a month less, and the fee is covered in about a month. Over the rest of the loan you pay $51,281 less interest ($51,031 after the fee). If you paid the same $50,000 but kept paying $2,025.62, you would save $143,646 and finish 7 years 11 months early instead.
Recast, prepay or refinance?
Recast when you want a lower required payment, your rate is already good and you have a lump sum (for example from selling a previous home).
Prepay without recasting when you want the most interest saved and do not need the lower payment. Model it in detail with the extra payment calculator.
Refinance when rates have fallen enough to change the rate itself; check the refinance break-even first.
A lump sum that brings you to 80% of the original home value may also let you ask to cancel PMI: see the PMI removal calculator.
Keep an emergency fund before putting cash into home equity, which is hard to get back out. This is an estimate for planning, not financial advice; your servicer's figures are final.
Pay it off faster
As an Amazon Associate I earn from qualifying purchases.
Prices and savings as of Oct 15, 2026, 5:05 AM UTC. Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon.com at the time of purchase will apply to the purchase of this product.
By the payment on the lump sum alone. At 6.5% with 25 years left, each $10,000 you pay down lowers the payment by about $67.52 a month.
How is a recast mortgage payment calculated?
The servicer subtracts your lump sum from the balance and works out a new level payment on that lower balance, at the same rate, over the months you have left. The loan still ends on the same date; only the payment changes.
Is it better to recast or just pay extra?
Paying the same lump sum without recasting saves more interest, because you keep making the higher payment and the loan ends years early. A recast gives up some of that saving in exchange for a lower required payment, which frees up monthly cash flow.
How much does a mortgage recast cost?
Servicers usually charge a one-time administrative fee and set a minimum lump sum. The amounts vary by servicer, so ask yours and enter the fee to see how many months of lower payments it takes to cover it.
Can every mortgage be recast?
No. Recasting is up to the servicer and the loan's investor. Many government-backed loans (FHA, VA and USDA) are not eligible, and some conventional servicers do not offer it. Ask your servicer before sending a lump sum.
Does a recast change my interest rate?
No. The rate and the payoff date stay the same. That is the difference from a refinance, which replaces the loan with a new one and has closing costs.
