Should you recast your mortgage?
A recast lowers your monthly payment without refinancing. But the same lump sum, applied as a plain principal payment, can save you more. Run your numbers and see both side by side.
On a $374,444 balance, recasting drops your payment by $337.60/mo — but applying the same lump sum without recasting pays the loan off 6 yr 8 mo sooner and saves $100,981 more in total interest.
No extra payment
- Payoff in
- 25 yr
- Interest left
- $384,038
Recast after lump sum
- Payoff in
- 25 yr
- Interest left
- $332,757
- Upfront fee
- $250
Lump sum, no recast
- Payoff in
- 18 yr 4 mo
- Interest left
- $231,776
Recasting wins if you want lower monthly payments now. Paying down principal without recasting wins if your goal is to pay the least interest and be debt-free sooner. Same lump sum — different goal.
What a recast actually does
When you recast, you pay a lump sum toward principal and the lender re-amortizes the smaller balance over your remaining term at your existing rate. Three things stay the same — your interest rate, your loan term, and your payoff date. The only thing that changes is the monthly payment, which goes down.
That makes a recast a tool for cash flow, not for getting out of debt faster. If your real goal is to pay the least interest, the comparison above usually shows that simply applying the lump sum to principal — and keeping your current payment — wins, because every dollar of the now-lower balance is retired faster.
When recasting makes sense anyway
- You came into a lump sum and want lower required payments for breathing room.
- You're keeping the loan (you like the rate) so refinancing doesn't fit.
- You want the option to pay extra later without being locked into a higher payment now.
Recast vs. refinance
A recast is not a refinance. There's no new loan, no appraisal, no closing costs, and no rate change — just a fee, often $150–$500. If today's rates are lower than yours, a refinance might beat both options here; if your rate is good, a recast or principal payment keeps it.
Read the full recast vs. principal breakdown →
Frequently asked
- Does a mortgage recast lower your interest rate?
- No. A recast keeps your rate and your payoff date the same. It only re-amortizes the reduced balance over the remaining term, which lowers your monthly payment.
- Is it better to recast or just pay down principal?
- Paying down principal without recasting saves more total interest and pays the loan off sooner, because your payment stays the same. Recasting lowers the monthly payment instead, helping cash flow. The calculator shows both for your numbers.
- What does a mortgage recast cost?
- Most servicers charge a one-time recast fee, commonly $150–$500, plus a minimum lump sum (often $5,000–$10,000). There is no new loan, appraisal or closing costs like a refinance.