Mortgage Recast Calculator

Enter your mortgage details below to calculate your potential savings with a recast.

What is Mortgage Recasting?

Mortgage recasting is when you make a large lump sum payment toward your mortgage's principal balance and your lender then reamortizes the loan based on the new, lower balance. This process:• Reduces your monthly payments
• Keeps your original interest rate
• Maintains your existing loan term

Understanding Calculator Fields

Current Mortgage Balance

This is the remaining principal amount on your mortgage. You can find this on your monthly statement or by contacting your lender.Typical range: $50,000 - $1,000,000

Interest Rate

Your current annual interest rate. This is the rate you're paying on your mortgage, not the current market rate.Typical range: 2% - 8%

Monthly Payment

Your current monthly principal and interest payment. Don't include taxes, insurance, or HOA fees.Typical range: $500 - $5,000

Lump Sum Payment

The amount you plan to pay toward your principal. Most lenders require a minimum of $5,000 - $10,000 for recasting.Minimum typically: $5,000

How does Mortgage Recasting Work?

When you recast your mortgage, you make a large lump sum payment that reduces your principal balance. Your lender then recalculates your monthly payments based on the new, lower balance while keeping the original interest rate and loan term. This results in lower monthly payments for the remainder of your loan term.Example:Original: $300,000 balance, $1,500 monthly payment
After $50,000 recast: $250,000 balance, $1,250 monthly payment

How to Calculate Mortgage Recast?

To calculate your new payment after recasting:

  1. Subtract your lump sum payment from your current principal balance
  2. Keep your existing interest rate and remaining loan term
  3. Recalculate monthly payments using the new lower principal
  4. Factor in any recast fees from your lender
  5. Consider the break-even period based on recast fees

Requirements for Mortgage Recasting:

  • Conventional or jumbo mortgage (FHA and VA loans typically don't qualify)
  • Minimum lump sum payment (usually $5,000 to $10,000, varies by lender)
  • Current on mortgage payments with no late payments in the last 12 months
  • Lender approval and processing fee payment (typically $250 - $500)

When is the Right Time for Mortgage Recast?

Consider recasting your mortgage when:

  • You receive a large sum of money (inheritance, bonus, home sale)
  • You want to lower monthly payments without refinancing
  • Current interest rates are higher than your existing rate
  • You want to maintain your current loan terms

Conclusion:

Mortgage recasting can be an excellent option for homeowners who want to lower their monthly payments while keeping their existing loan terms and interest rate. It's particularly advantageous when you have a large sum of money available and current interest rates are higher than your existing rate. While there are some requirements and fees involved, the long-term savings and reduced monthly payments can make it a worthwhile financial decision.

Benefits of Recasting:

  • Lower monthly payments
  • Less interest paid over the life of the loan
  • Keep your existing interest rate
  • Usually has a lower fee than refinancing
  • No credit check or income verification required
  • Maintains your original loan term