Mortgage Recast Calculator

See your new monthly payment after a lump sum and a mortgage recast, the interest saved, the fee break-even and how it compares with keeping the same payment.

Reviewed by Dany, RightSums team · Updated

Runs in your browser. Free, no sign-up.

personal-finance · Daily life · US

Enter your principal balance, interest rate and the time left on the loan, or the original loan amount, term and payments made so far. Add the lump sum you would pay and the recast fee your servicer quotes. The calculator re-amortizes the lower balance over the same remaining term to show your new principal and interest payment, the monthly saving, the interest saved and how many months of lower payments cover the fee. It also shows the other route: paying the lump sum but keeping your old payment, so the loan ends years early and saves more interest. A year-by-year balance table compares all three. It assumes a fixed rate and leaves out escrow. It is an estimate, not financial advice.

Accepted inputs

  • Principal balance and time left, or original loan amount, term and payments made
  • Interest rate (% a year)
  • Lump sum
  • Recast fee

Outputs

  • New monthly payment
  • Monthly saving
  • Interest saved over the remaining term
  • Months to recover the recast fee
  • Recast compared with keeping the same payment
  • Different lump sum amounts
  • Year-by-year balance for each option

How to use the Mortgage Recast Calculator

  1. Enter your principal balance and the time left, or switch to the original loan amount, term and payments already made.
  2. Add your interest rate, the lump sum you would pay and the recast fee your servicer charges.
  3. The calculator spreads the lower balance over the same months left to find the new principal and interest payment.
  4. Compare the monthly saving, interest saved and fee break-even with keeping your old payment and paying the loan off early.

Frequently asked questions

How much will my mortgage payment drop if I recast?

On a $300,000 balance at 6% with 25 years left, paying $50,000 and recasting lowers the principal and interest payment from $1,932.90 to $1,610.75, a saving of $322.15 a month. At that rate and term, each $1,000 you pay cuts the payment by about $6.44. Taxes and insurance in escrow do not change.

Is it better to recast or just keep paying the same amount?

Keeping the same payment saves more interest; recasting frees up monthly cash. With $50,000 paid off $300,000 at 6% and 25 years left, a recast saves $46,645 in interest. Keeping the $1,932.90 payment instead clears the loan in 17 years 5 months, 7 years 7 months sooner, and saves $126,657.

Is a mortgage recast fee worth it?

It depends how long you keep the loan. A $250 fee against a $322.15 monthly saving is covered in 1 month. On $250,000 at 7% with 20 years left, a $20,000 lump sum lowers the payment by $155.06, so a $500 fee takes 4 months to earn back. Ask your servicer for its actual fee first.

How is the new payment after a recast worked out?

It is the standard loan formula on the lower balance: payment = balance × r ÷ (1 − (1 + r)^−n), where r is the yearly rate ÷ 12 and n is the months left. For $250,000 at 6% (r = 0.005) over 300 months, that gives $1,610.75 a month for principal and interest.

Can I recast a mortgage in the UK?

Recasting is a US servicer practice. In the UK, MoneyHelper explains that overpaying either shortens your mortgage or lowers your monthly payments, so ask your lender which it will do after a lump sum. Many lenders allow overpayments of up to 10% a year without a charge. Use our mortgage overpayment calculator for UK loans.

Sources

The rates and rules in this tool come from:

Related tools

  • Compound Interest Calculator

    See how savings grow with compound interest. Enter a starting deposit, a monthly top-up, an interest rate and the number of years.

  • Mortgage Overpayment Calculator

    See how much interest and time you save by overpaying your mortgage each month or paying a lump sum. Side-by-side balance table included.

  • Mortgage Affordability Calculator

    Estimate how much you could borrow for a mortgage from one or two incomes, your monthly commitments and your deposit, using income multiples.

  • Mortgage Calculator

    Work out monthly mortgage payments in the UK, US or Canada, with total interest, loan-to-value, US taxes and insurance, and Canadian half-yearly compounding.