Mortgage Recast Calculator
See your new lower monthly payment after recasting — applying a lump sum to principal and re-amortizing over the remaining term.
How to use this tool
- Enter your current balance, rate, and the years remaining.
- Enter the lump sum you will apply to principal.
- Read your new monthly payment, monthly savings, and total interest saved.
- Compare against refinancing if rates have changed.
Recasting lowers your mortgage payment by applying a lump sum to principal and re-amortizing — without changing your rate or payoff date. Enter your balance and the lump sum to see your new payment and what you save.
Formula
Old payment = pmt(balance) and new payment = pmt(balance − lump sum), both using M = P · r / (1 − (1 + r)−n) over the same remaining term n.
Monthly savings = old payment − new payment.
Interest saved = (old payment × n − balance) − (new payment × n − new balance).
A recast keeps the same rate and payoff date but lowers the payment after a principal paydown.
How it works
A mortgage recast (or re-amortization) lowers your monthly payment by applying a lump sum to principal and then recalculating the payment over the same remaining term and interest rate. Unlike a refinance, a recast does not change your rate or reset the clock — it keeps the original payoff date but shrinks the payment because there is less principal to spread across the remaining months.
The calculator computes the payment before and after the lump sum, the monthly savings, and the total interest avoided over the remaining term. Recasting is usually far cheaper than refinancing (lenders charge a small flat fee rather than full closing costs) and is attractive when rates have risen, since refinancing would mean a higher rate. It does require a minimum lump sum and a lender that permits recasts; this estimate ignores the recast fee and assumes a fixed rate.
Reviewed by the AbraCalc Mortgage Desk. Educational estimate only, not financial advice; confirm your lender's recast policy, minimum paydown, and fee.
Worked example
$250,000 at 6%, 25 years left, $50,000 lump sum
- Monthly rate r = 6% ÷ 12 = 0.005; remaining term n = 25 × 12 = 300 months.
- Old payment = pmt(250,000) = $1,610.75.
- New balance after lump sum = 250,000 − 50,000 = 200,000.
- New payment = pmt(200,000) = $1,288.60.
- Monthly savings = 1,610.75 − 1,288.60 = $322.15; total interest saved ≈ $46,645.21.
New payment $1,288.60 (was $1,610.75); monthly savings $322.15; interest saved $46,645.21
New payment after recast on $250,000 at 6% (25 yrs left)
| Lump sum | New payment | Monthly savings |
|---|---|---|
| $10,000 | $1,546.32 | $64.43 |
| $25,000 | $1,449.68 | $161.08 |
| $50,000 | $1,288.60 | $322.15 |
| $100,000 | $966.45 | $644.30 |
Key terms
- Recast
- Re-amortizing a loan after a lump-sum principal payment to lower the monthly payment at the same rate and payoff date.
- Re-amortization
- Recalculating the level payment over the remaining term after the balance changes.
- Refinance vs recast
- A refinance replaces the loan (new rate, new term, closing costs); a recast keeps the loan and only lowers the payment.
- Lump-sum paydown
- An extra payment applied directly to principal, reducing the balance the payment is based on.
Frequently asked questions
- How is a recast different from refinancing?
- A recast keeps your existing loan, rate, and payoff date and only lowers the payment after a lump-sum paydown. A refinance replaces the loan entirely with a new rate, term, and closing costs.
- Does a recast lower my interest rate?
- No. The rate stays the same. Your payment drops because the lump sum reduces the principal that the payment is calculated on, and you also pay less total interest.
- Is recasting worth it?
- It often is when you have a lump sum, a good existing rate you do not want to lose, and a lender that allows recasts for a small flat fee — much cheaper than refinancing's closing costs.