Refinance vs Mortgage Recast Calculator

Keep your rate vs reset your rate

Refinance vs Mortgage Recast

A recast keeps your rate for a small fee. A refinance resets everything for thousands in closing costs. See which actually wins.

If you've got a lump sum and want a lower mortgage payment, most people jump straight to refinancing — but if your current rate is good, a recast can get you most of the payment relief for a fraction of the cost. The catch: a recast can't change your rate or term, and not every loan qualifies. This calculator runs both numbers so you can see which one actually makes sense for your situation.

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Please enter your current loan balance to calculate.
› Compare against a refinance rate (optional)
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New monthly payment
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After applying your lump sum, comparing both paths.
OptionUpfront costNew paymentRate after
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Missing loan balance

Please enter your current loan balance before calculating — it's the required field.

What a recast actually does

You hand your lender a lump-sum payment toward the principal. They recalculate ("re-amortize") your monthly payment based on the new, smaller balance — using the exact same rate and the exact same remaining term you already have. No new application, no appraisal, no credit check. Most lenders charge $150-500 for it and require a minimum lump sum, often $5,000-10,000.

The two paths
Recast: new payment = amortize(balance − lump sum, SAME rate, SAME remaining term)
Refinance: new payment = amortize(balance − lump sum, NEW rate, NEW chosen term)
Worked example — $320,000 balance, 3.25% rate, 24 years remaining, $50,000 lump sum: recast drops the payment from about $1,803 to roughly $1,520/month for a $250 fee. Refinancing the same reduced balance at a 6.6% rate would cost $8,100+ in closing costs (3%) and could push the payment higher than the recast, even with the smaller balance, because the rate jump outweighs the principal reduction.

When a recast is the obvious choice

  • Your current rate is at or below today's market rate — refinancing would mean giving up a good deal.
  • You have a conventional loan (FHA, VA, USDA, and most jumbo loans aren't eligible for recasting).
  • You just want a lower payment, not a different rate, cash out, or shorter term.
  • You'd rather skip the credit check, appraisal, and paperwork of a full refinance.

When refinancing is worth the extra cost

  • Today's rate is meaningfully below yours (often cited as 0.75%+ lower) — the long-term interest savings can outweigh the upfront closing costs.
  • You want to change your loan term, switch from adjustable to fixed, or do a cash-out refinance.
  • Your loan type isn't eligible for recasting in the first place.

The one thing a recast can't do

A recast doesn't shorten your loan term — you'll still be paying it off on the original schedule, just with a smaller required payment each month. If your real goal is to pay off the mortgage faster rather than lower the monthly bill, simply making extra principal payments without formally recasting may serve you better, since that approach reduces your timeline rather than just your payment.

For the full underlying numbers, see the mortgage calculator and mortgage refinance calculator for a deeper look at refinance-specific breakeven timing.

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Frequently asked questions

Does a mortgage recast change my interest rate?+
No. Your interest rate and remaining loan term stay exactly the same. Only your monthly payment changes, because it's recalculated based on your new, smaller principal balance.
How much does a mortgage recast cost?+
Typically $150 to $500 in lender fees, compared to 2-6% of your loan amount for a full refinance's closing costs. There's no appraisal fee, credit check, or underwriting cost involved.
What's the minimum lump sum needed to recast?+
It varies by lender, but $5,000 to $10,000 is typical as a minimum. The smaller your lump sum, the smaller the change in your monthly payment will be.
Can I recast an FHA, VA, or USDA loan?+
No, generally not. Recasting is typically only available on conventional conforming loans. Government-backed loans (FHA, VA, USDA) and most jumbo loans don't qualify for recasting under current guidelines.
If I just send extra money to my lender, does that automatically recast my loan?+
No. Sending extra principal payments reduces your balance but doesn't change your required monthly payment unless you formally request and pay for a recast. Without a recast, your payment stays the same and you simply pay off the loan faster.
How long does a recast take?+
Typically 30-60 days from when your lender receives the lump sum and the processing fee. You'll continue making your normal payment until the new, lower payment takes effect.
Is it better to recast or refinance if rates have dropped significantly?+
If today's rate is meaningfully below yours, refinancing usually wins despite the higher upfront cost, because you capture the lower rate on the entire remaining balance going forward, not just a smaller payment from a lump sum.
This calculator provides general estimates only and is not financial advice. It models standard recast (same rate/term, smaller balance) and refinance (new rate, full closing costs) mechanics using figures you enter, and does not account for your specific lender's recast eligibility, minimum lump sum requirements, possible PMI changes, or tax implications. Confirm exact terms with your loan servicer or a mortgage professional before proceeding.

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