Mortgage Recast Calculator
Discover how much you could save by making a lump‑sum payment toward your mortgage principal
Mortgage Recast Calculator: Unlock Instant Savings and Lower Payments
Mortgage Recast Calculator helps homeowners visualize how a single lump‑sum payment can dramatically lower their monthly obligations without refinancing. If you’ve ever wondered what does recasting a mortgage mean, you’re in the right place. This in‑depth guide will cover the recast mortgage definition, explore mortgage recast meaning, explain what is a mortgage recast, and show you step‑by‑step how to calculate savings manually. You’ll also learn why a mortgage loan recast might be the best move for reducing payments, and discover how using our tool can simplify the math.
What Is Mortgage Recasting?
A mortgage recast (also known as a mortgage loan recast) occurs when you apply a large, one‑time principal payment to your existing mortgage and ask your lender to re‑amortize the loan. Unlike refinancing, recasting keeps your current interest rate and loan term intact—only the payment schedule changes. The lender recalculates your monthly payment based on the new, lower principal balance and the original remaining term.
Key Terminology
Recast mortgage definition: The official meaning of recasting a mortgage—applying a lump‑sum principal reduction and re‑spreading payments.
Re-amortization: The process lenders use to recalculate monthly payments after a lump‑sum contribution.
Principal reduction: The extra payment you make toward your loan balance.
Why Consider Recasting Instead of Refinancing?
Lower Fees: A mortgage recast fee typically ranges from $150 to $500, far less than closing costs for refinancing.
Stable Rate: You lock in your existing interest rate, avoiding the risk of higher rates.
No Reset of Term: The original payoff date remains unchanged.
Immediate Payment Relief: Your monthly payment drops right away after processing.
If you’re asking “what does recasting a mortgage mean?”, remember it’s about smoothing out your existing amortization with a fresh principal figure—no new loan, no appraisal, no underwriting.
How Does Mortgage Recasting Work?
Check Eligibility
Most conventional loans qualify; FHA, VA, or USDA loans may have restrictions.
Lenders often require a minimum lump‑sum payment (commonly $5,000–10,000).
Make the Lump‑Sum Payment
Send your principal payment directly to the lender, specifying it’s for recasting.
Pay the Recast Fee
A one‑time fee covers administrative costs (order of $200–$400).
Re‑Amortization
Within 30–60 days, the lender sends a new amortization schedule and reduced monthly payment amount.
Manual Calculation: How to Compute a Recast by Hand
While our Mortgage Recast Calculator does the heavy lifting, understanding the calculation helps you see the impact:
Original Loan Details
Principal (P₀)
Annual interest rate (r)
Remaining term in months (N)
New Principal
P₁ = P₀ – LumpSum- Monthly Interest Rate
i = r / 12 - New Monthly Payment Formula
5. Total Interest Saved
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Compute total interest before and after recast by summing M × N – principal.
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Example Calculation
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Original balance: $50,00,000
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Rate: 6% (0.06 annual → 0.005 monthly)
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Remaining term: 240 months (20 years)
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Lump‑sum payment: $5,00,000
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New Principal: $50,00,000 – $5,00,000 = $45,00,000
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Monthly Rate: 0.06 / 12 = 0.005
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New Payment:
M = 0.005 × 45,00,000 ÷ [1 – (1 + 0.005)^–240] ≈ ₹32,779
This manual approach highlights exactly how “mortgage recast” savings materialize.
Comparing Recast vs. Refinance
| Feature | Recast Mortgage | Refinance Mortgage |
|---|---|---|
| Interest Rate | Unchanged | New rate (could be higher or lower) |
| Fees | $150–$500 | 2–6% of loan amount |
| Credit Check | No | Yes |
| Loan Term | Same | Reset to new term |
| Speed | 1–2 months | 30–45 days |
Pros and Cons of Recasting a Mortgage
Pros
Lower monthly payment without refinancing
Minimal fees and paperwork
No change to interest rate or term
Cons
Requires sizable cash outlay
Not all loan types eligible
No interest rate reduction
Frequently Asked Questions
What is a mortgage recast?
A mortgage recast is when you make a large lump‑sum payment toward your loan’s principal, and the lender recalculates your monthly payments over the remaining term based on the lower balance—without changing the interest rate or loan term.
What does it mean to recast a mortgage?
Recasting a mortgage means applying a principal lump‑sum payment and then re‑amortizing the loan so that future monthly payments are lower—while your interest rate and payoff date stay the same.
How to recast a mortgage?
Confirm your loan is eligible (usually conventional only).
Make the required lump‑sum payment (often ₹5–10 lakh minimum).
Contact your lender and pay the recast fee (typically a few hundred dollars).
Lender re‑amortizes your loan, and your monthly payments are adjusted.
How many times can you recast a mortgage?
Most lenders do not impose a limit—you can recast multiple times provided you meet their minimum principal payment and fee requirements.
What does it mean to recast a mortgage?
It means you apply a lump‑sum to your loan, and the lender reworks your payment schedule to spread the remaining balance evenly across the original term—lowering each monthly payment.
Link to Related Articles
For deeper dives, be sure to explore:
Mortgage Recast Explained: What It Is, How It Works & Why It Matters
Mortgage Recast Policies: Comparing Major Lenders (PNC, Mr. Cooper, Freedom, US Bank, AmeriHome)
Mortgage Recast Calculator: See Your Potential Payment Savings
Mortgage Recast: Advanced Questions Answered (Costs, Limits, Eligibility)
Before you go, here’s a quick overview of our calculator’s powerful features:
Instant Savings Preview
See immediately how a lump‑sum payment lowers your monthly payment, total interest, and overall timeline—no waiting.
Break‑even Analysis
Know exactly how many months it takes to recoup any recast fees, so you’re never caught off‑guard by upfront costs.
Customized Payoff Date
Enter your next payment date and remaining term to get a precise calendar date for your mortgage payoff.
Detailed Interest Insights
Compare total interest owed before and after the recast to understand the full financial impact of your extra payment.
Flexible Term Entry
Separate “Years” and “Months” fields let you represent any remaining term combination—perfect for mortgages with non‑standard schedules.
Built‑In Calendar Picker
A native date control makes selecting your next payment date fast and foolproof on desktop or mobile.
Responsive Design
Inputs and results adapt seamlessly between desktop (side‑by‑side view) and mobile (stacked full‑width fields), so you never lose context.
On‑Demand Guidance
Hover‑over tooltips on every input explain exactly what data to enter—ideal for first‑time users or complex loan terms.
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