A recast is not a refinance. You put a lump sum against principal, your lender re-amortizes the remaining balance over the same remaining term, and your payment drops — with no credit check, no appraisal, and no new rate. This calculator shows the new payment, the monthly relief, and the lifetime interest change.
Every row below is computed with the same amortization math the calculator runs. Recasts assume the term is not extended — the remaining years stay the same, which is what makes a recast different from a refinance.
| Scenario | Old Payment | New Payment | Monthly Drop | Interest Saved |
|---|---|---|---|---|
| $320,000 balance, 6.5%, 27 yrs left, $60,000 cash | $2,098 | $1,704 | $393 | $127,440 |
| $400,000 balance, 7.25%, 29 yrs left, $75,000 cash | $2,755 | $2,239 | $517 | $179,788 |
| $200,000 balance, 4.5%, 18 yrs left, $40,000 cash | $1,353 | $1,082 | $271 | $58,434 |
| $500,000 balance, 6.0%, 25 yrs left, $100,000 cash | $3,222 | $2,577 | $644 | $193,290 |
| $250,000 balance, 5.75%, 22 yrs left, $25,000 cash | $1,671 | $1,504 | $167 | $44,113 |
Note the pattern: the monthly relief scales with how much of the balance you retire, but the interest savings is what makes a recast genuinely valuable — a refinance at a higher rate can easily erase the payment drop.
Both reduce your monthly payment, but they do it by different mechanisms — and in 2026's rate environment, confusing them is expensive. If you bought or refinanced at 3%–4% and today's market rate is 6.5%+, a refinance would raise your rate. A recast lets you keep that old rate and still cut the payment.
| Feature | Recast | Refinance |
|---|---|---|
| Credit check | None | Full underwriting |
| Appraisal | Usually not required | Usually required |
| Interest rate | Unchanged | Reset to market |
| Loan term | Same remaining term | Restarts (often 30 yrs) |
| Typical cost | $150–$500 flat fee | 2%–5% of loan in closing costs |
| Best when | Your rate is below today's market | Your rate is above today's market |
A recast does not lower your rate, does not shorten your term, and does not remove PMI unless the new loan-to-value crosses your lender's threshold. It also cannot be used to take cash out — that requires a cash-out refinance or a home equity product. Not every lender even offers recasts; many do so only for conventional loans, and some charge nothing at all if you ask.
The monthly payment drop from a recast looks unremarkable — a few hundred dollars. The lifetime interest number looks enormous in comparison, and people often assume it is wrong. It is not, and the reason is worth understanding.
When you pay $60,000 against a $320,000 balance, two things happen at once. Your payment falls because the balance it amortizes is smaller. But the interest saved is not just what that $60,000 would have earned — it is also the fact that every future payment now carries a smaller balance, so the interest portion of each of the remaining 324 payments shrinks too. The $60,000 stops compounding against you for 27 years.
This is why a recast is most powerful early in a loan and least powerful near the end. Compare the 27-year scenario above with the 18-year one: the same style of lump sum produces a much larger lifetime saving when more years of compounding remain. If you are past the halfway point on your mortgage, run the numbers before paying a recast fee — a plain principal curtailment may serve you better.
⚠️ Disclaimer: A recast calculator produces an estimate based on the inputs you supply and standard amortization math. Your servicer may apply different rounding, require a minimum lump sum (commonly $5,000 or 10% of the balance), or decline the request entirely. Confirm eligibility, fees, and the resulting payment with your loan servicer before moving money. This is not financial or legal advice.