Mortgage Recast Calculator – Pay a lump sum and reduce your monthly payment
Imagine if you could lower your monthly mortgage payment without the stress of refinancing, paperwork, or starting a whole new loan. Sounds dreamy, right? A mortgage recast can be a smart strategy for borrowers with a large lump sum who want to lower monthly payments without refinancing Consumer Financial Protection Bureau (CFPB) explains how recasting works differently than refinancing—highlighting benefits, limitations, and lender policies. Their official guide on mortgage recasts is a reliable resource for understanding the financial mechanics before using your recast calculator. Enter the Mortgage Recast Calculator—a smart tool that helps you figure out your new monthly payment after making a lump-sum payment on your existing mortgage. This isn't refinancing; it's recasting. And yes, there's a difference.
Mortgage Recast Calculator
Example: A $20,000 lump-sum on a $200,000 balance at 4.5% interest with 200 months remaining can save you thousands and reduce your monthly payment by over $100.
What Is Mortgage Recasting?
Recasting a mortgage means making a lump-sum payment toward your loan principal and then recalculating your monthly payments based on the new (lower) balance—but keeping the same interest rate and loan term. Unlike refinancing, which involves closing costs, credit checks, and potentially new rates, recasting is a quieter, simpler way to reduce your monthly financial pressure. It’s especially useful for:
- Homeowners who got a work bonus or inheritance
- People who sold a second home or investment
- Anyone who wants lower payments but loves their current rate
Why Use a Mortgage Recast Calculator?
Because doing the math in your head is... not fun. This calculator helps you:
- Estimate new monthly payments after your lump-sum
- Visualize interest savings over time
- Compare scenarios before calling your lender
- Avoid overpaying or guessing
How Does Recasting Work?
Let’s say you took out a $300,000 mortgage at 4% interest over 30 years. Five years in, you receive a $50,000 inheritance and want to put it toward your loan. With recasting, you apply the $50,000 to your principal. Your loan term stays the same, and your monthly payment decreases (based on the new principal). No credit check. No requalification. No new loan. Our recast mortgage payment calculator shows you exactly how much your payment would drop.
How to Use the Mortgage Recast Calculator
It’s as easy as 1-2-3:
- Enter your current loan balance
- Input your annual interest rate and remaining loan term in months
- Add your lump-sum payment amount
Benefits of Recasting a Mortgage
- ✅ Lower Monthly Payments without refinancing
- ✅ No Need to Change Your Loan Terms
- ✅ Fewer Fees (usually $150–$500 only)
- ✅ Preserve Your Low Interest Rate
- ✅ Faster Principal Reduction
Especially during times of rising interest rates, recasting lets you keep your original rate and save money. It's a win-win.
Recasting vs Refinancing – What's the Difference?
| Feature | Recasting | Refinancing |
|---|---|---|
| Interest Rate | Stays the same | Usually changes |
| Loan Term | Stays the same | Resets or changes |
| Monthly Payment | Decreases | Can increase or decrease |
| Credit Check | Not required | Required |
| Closing Costs | Minimal (low fee) | Higher (2–5% of loan) |
| Time to Process | Quick (days) | Slower (weeks) |
If you’re happy with your current interest rate and loan, recasting is usually the better choice.
Is Mortgage Recasting Right for You?
It might be if:
- You have extra cash (bonus, sale of assets, etc.)
- You want to reduce monthly outflow
- You don’t want the hassle of a refinance
- Your lender allows it (check with them—some don’t!)
Also, if you're in the middle or end of your mortgage, it’s a clever move to save on interest and free up monthly cash. Check with your lender—not all loans are eligible for recasting, especially FHA or VA loans.
FAQs
What is a mortgage recast calculator used for?
It’s used to estimate new mortgage payments after making a lump-sum principal payment without changing your loan’s interest rate or term.
Is a mortgage recast the same as refinancing?
No. Recasting adjusts your current loan, while refinancing replaces it entirely with a new loan.
How much do you need to recast a mortgage?
Most lenders require a lump sum of $5,000 or more to qualify for recasting, but it varies by lender.
Can all mortgages be recast?
No. FHA, VA, and certain fixed-rate loans may not allow recasting. Always check with your loan servicer first.
Will a recast reduce my loan term?
No, your loan term stays the same. Only your monthly payment decreases.