01What this calculator tells you
A mortgage recast lowers your monthly payment by applying a lump-sum payment to your principal and then re-amortizing the remaining balance over the same term at the same interest rate. This calculator shows your new principal-and-interest payment, how much lower it is each month, your new balance, and the interest you would save over the life of the loan.
Enter your original loan amount, interest rate, term, and the month and year the loan started, then add the lump sum you plan to put down. The calculator estimates today’s balance for you and re-amortizes it — and unlike a refinance, a recast keeps your rate and payoff date exactly the same, so only the payment shrinks. You can compare more money tools any time in our full calculator library.
02Recast vs. refinance vs. extra payments
A recast is one of three common ways to use spare cash against a mortgage. Which one wins depends on your rate, your goal, and how much flexibility you want. All three rely on amortization — how each payment splits between interest and principal — covered in the mortgage guides from the Consumer Financial Protection Bureau (CFPB).
03Which loans can be recast
Eligibility is set by your loan type and servicer, not by this calculator. Most conventional loans permit a recast, while government-backed loans usually do not — the CFPB breaks down the different kinds of home loans and how they work.
- Usually eligible: conventional conforming loans owned by Fannie Mae or Freddie Mac.
- Usually not eligible: FHA, VA and USDA loans, which are structured around their own amortization rules.
- Sometimes eligible: jumbo and portfolio loans — ask your servicer, as terms vary by lender.
- Requirements: current payments, a minimum lump sum (often $5,000-$10,000 or a set percentage), and a small fee.
The math here is exact for a fixed-rate loan, but a real recast depends on your servicer’s rules. Treat the result as a close estimate, not a quote.
- Principal and interest only. Your real bill also includes escrow for taxes and insurance, which a recast does not change. The IRS home mortgage interest rules (Publication 936) also mean lowering interest can slightly change what you deduct.
- Minimums and timing. Servicers set a minimum lump sum and may only recast once the payment posts; the new payment usually starts the following cycle.
- Opportunity cost. Cash used for the lump sum is no longer available to invest or keep as an emergency fund — compare the guaranteed payment reduction against other uses.
- Adjustable-rate loans. If your rate can change, the estimate holds only until the next adjustment.
- Enter the original loan amount, interest rate and loan term.
- Pick the month and year your loan started so the calculator can estimate today’s balance.
- Enter the lump-sum principal payment you plan to make, and your lender’s recast fee if you know it.
- Press Calculate to see today’s balance, the new payment, your monthly savings, and lifetime interest saved.
To weigh other savings decisions alongside your mortgage, try our early payoff calculator for a different big-ticket cash-flow comparison.
04Related calculators
Working through a related project? Try our Out-the-Door Price Calculator, Lead Time Calculator, and TV Wall Mount Height Calculator.
01The recast formula
A recast works in two stages: first reconstruct today’s balance from your original loan and start date, then re-amortize the new balance (today’s balance minus the lump sum) over the same remaining term at the same rate. Both stages use the standard amortized-payment formula.
Where:
- P= the original loan amount you borrowed.
- i= the monthly interest rate = annual rate / 12 (e.g. 6.5% -> 0.0054167).
- M0= the original monthly payment = P x i / (1 – (1 + i)^-N), where N = term x 12.
- p= the number of payments made from the start date to today; B_new = B_p – lump sum, and n = N – p.
02Worked example
Take a $400,000 loan at 6.5% over 30 years, started about 5 years ago, with a $50,000 lump sum. Work it one line at a time:
That is about $338 per month lower — roughly $2,528 down to $2,191. Across the 300 remaining payments it is roughly $101,000 less paid over time — about $51,000 of it true interest savings once you subtract the $50,000 you contributed. You can double-check the compounding idea with the SEC’s compound interest calculator at Investor.gov, and review the borrower basics in the CFPB’s owning-a-home guide.