Recast Fee Calculator

Mortgage recast reduces payment after lump-sum prepayment.

Current balance

Lump-sum payment

Interest rate %

Years remaining

Recast fee

Monthly payment reduction

$250

New monthly payment

$1,252

Fee payback months

1.2

How the math works

Payment at new balance, same rate, same remaining term. Breakeven = fee ÷ monthly savings.

$300k at 3.5% 25yr = $1,504/mo. $250k = $1,253/mo. $251 savings. $300/$251 = 1.2 month payback.

How to Use

Enter current balance.
Enter lump-sum payment.
Enter interest rate %.
Enter years remaining.
Enter recast fee.
Read payment reduction + breakeven.

Frequently Asked Questions

What is recasting?

After lump-sum principal payment, lender re-amortizes remaining balance over remaining term. Reduces monthly payment. Does not change interest rate. Fee: $250-500 typical. Cheaper than refinancing (keep current rate). Available on most conventional loans; rarely on FHA/VA/USDA.

When does it make sense?

(1) Windfall lump-sum (bonus, inheritance, sale proceeds). (2) Low current interest rate you want to keep. (3) Want lower monthly payment (not faster payoff). (4) Hesitant to refinance into higher rate. (5) Self-employed with variable income wanting fixed monthly reduction. Doesn't make sense for those wanting faster payoff — regular prepayment achieves that without fee.

Recast vs refinance?

Recast: preserves rate, cheap ($250-500), no credit check, faster (2-4 weeks). Refinance: potentially new rate, expensive ($3-7k in fees), credit check required, slower (30-60 days). If current rate > new market rate, refinance. If current rate ≤ market, recast. Most 2020-2021 rate homeowners should recast, not refinance.

Payment reduction math?

Example: $300k balance at 3.5%, 25 years remaining, $50k lump-sum. New balance $250k recast over 25 years at 3.5% = $1,253/mo (vs $1,504/mo original = $251/mo savings). Total interest saved over 25 years: $75k. Recast fee $300 = 1.2 months savings payback. Financial logic: strong positive NPV.