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Refinance vs Recast Calculator

Decide whether to refinance your mortgage at a new rate or keep the current loan and recast it with a lump-sum principal payment. See payment, interest, and break-even for each path.

Current mortgage

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%

Recast scenario (keep current loan)

$
$

Typical recast fees: $150–$500.

Refinance scenario (replace loan)

%
$

Current loan

$2,253

monthly payment

Total interest: $410,108

Recast

$1,972

monthly payment after lump

Save $282/mo

Total interest after recast: $358,845

Refinance

$1,970

monthly payment on new loan

Save $283/mo

Total interest: $389,306

Decision framework

Refinance break-even: 23 months to recover $6,500 in closing costs.

A recast keeps your current rate and term intact, just lowering the payment by re-amortizing the reduced balance. It makes sense when current rates are higher than yours but you have cash to deploy. A refinance is usually better when rates have dropped materially and you plan to stay long enough to clear closing costs.

How to Use

  1. Enter your current mortgage balance, rate, and years remaining to set the baseline payment.
  2. For the recast scenario, enter the lump-sum principal payment and the recast fee.
  3. For the refinance scenario, enter the new rate, term, and total closing costs.
  4. Compare new monthly payment, total interest, and the months required to recover refinance closing costs.
  5. Pick recast when your current rate is already competitive and you have cash; pick refinance when rates have dropped meaningfully and you'll stay long enough.

Frequently Asked Questions

What does a mortgage recast do?

A recast keeps the existing mortgage (same rate, same term) but lowers the monthly payment by re-amortizing the reduced balance after a lump-sum principal payment. Most lenders charge a small fee and require a minimum lump sum (often $5k–$10k).

When is a refinance better than a recast?

Refinance wins when market rates are meaningfully below your current rate and you'll stay in the loan long enough to recover closing costs. Recast wins when your current rate is already competitive and you just want to reduce the payment with cash.

Can I recast any mortgage?

Most conforming conventional mortgages allow recasting. Government-backed loans (FHA, VA, USDA) usually do not. Check your note or ask your servicer before planning on a recast.

Does a recast save interest?

Yes, because the balance is lower. Total interest paid over the remainder of the term drops materially, even though the rate and payoff date don't change. A refinance can save more if the rate drops are large enough.

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