Mortgage Recast CalculatorFree online financial calculator — instant results, no sign-up
Calculate the payment reduction from a principal lump sum followed by a loan recast.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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About the Mortgage Recast Calculator
The Mortgage Recast Calculator estimates how a principal lump-sum payment followed by a loan recast can lower your monthly mortgage principal-and-interest payment. It keeps your interest rate and remaining term unchanged while recalculating payments on the reduced balance. It also estimates remaining interest savings after subtracting the recast fee.
- Current balance ($)
- Your outstanding mortgage principal before the lump-sum payment, in dollars; the default is $280,000.
- Lump sum ($)
- The additional principal payment you plan to make before recasting, in dollars; the default is $40,000.
- Annual rate (%)
- Your mortgage's annual interest rate expressed as a percentage, not its APR; the default is 6%.
- Remaining term (months)
- The number of monthly payments remaining on your mortgage, in months; the default is 300.
- Recast fee ($)
- The lender's charge for processing the recast, in dollars; the default is $250.
Formula and method
r = a / 1200; B_new = B - L. For r > 0: P_old = B × r / [1 - (1 + r)^(-n)] and P_new = B_new × r / [1 - (1 + r)^(-n)]. For r = 0: P_old = B / n and P_new = B_new / n. Monthly reduction: D = P_old - P_new. Interest savings less recast fee: S = (n × P_old - B) - (n × P_new - B_new) - F = n × D - L - F.
- BCurrent outstanding principal balance in dollars.
- LLump-sum principal payment in dollars.
- aAnnual interest rate entered as a percentage, such as 6 for 6%.
- rMonthly interest rate as a decimal.
- nNumber of monthly payments remaining.
- B_newPrincipal balance after applying the lump sum.
- P_oldCalculated monthly principal-and-interest payment before the recast, in dollars.
- P_newCalculated monthly principal-and-interest payment after the recast, in dollars.
- DMonthly payment reduction in dollars.
- FRecast fee paid separately, in dollars.
- SEstimated remaining interest savings less the recast fee, in dollars.
Convert the annual rate to a monthly rate and calculate the payment that amortizes the current balance over the remaining term. Subtract the lump sum from the balance and calculate the recast payment using the same rate and term. Compare the payments, then compare total remaining interest under both schedules and subtract the recast fee. Retain full precision during calculations and round displayed dollar amounts to cents. With a $280,000 balance, a $40,000 lump sum, a 6% annual rate, 300 months remaining, and a $250 recast fee, the new monthly payment is $1,546.32, the monthly reduction is $257.72, and interest savings less the recast fee are $37,066.17.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Current balance280000 $
- Lump sum40000 $
- Annual rate6 %
- Remaining term300 months
- Recast fee250 $
Results
- New monthly payment$1,546.32
- Monthly reduction$257.72
- Interest savings less recast fee$37,066.17
How to use the Mortgage Recast Calculator
- 1Enter your current outstanding principal balance, excluding escrow funds and unpaid fees.
- 2Enter the lump sum you intend to apply directly to principal.
- 3Enter your current annual mortgage interest rate and remaining term in months.
- 4Enter the recast fee quoted by your loan servicer.
- 5Review the new payment, monthly reduction, and net interest savings, then confirm recast eligibility and timing with your servicer.
Reading your result
New monthly payment is the estimated principal-and-interest payment after the lump sum and recast: $1,546.32 with the default inputs. Monthly reduction is the decrease from the calculated payment without the lump sum or recast: $257.72 per month. Interest savings less recast fee is the reduction in remaining interest compared with continuing the original amortization schedule, minus the $250 fee: $37,066.17. This last figure is not simply the monthly reduction multiplied by 300, because the $40,000 lump sum is principal paid upfront rather than interest saved.
Limitations
The calculation assumes a fully amortizing, fixed-rate mortgage with monthly payments, an immediate principal reduction and recast, and no change to the remaining term. The lump sum must be nonnegative and below the current balance for a continuing loan; paying the entire balance is a payoff rather than a recast. The remaining term must be positive. The fee is assumed to be paid separately, not financed. Taxes, insurance, mortgage insurance, escrow changes, accrued interest, other charges, and future extra payments are excluded. Actual lender payment rounding and processing dates can change results. Savings are nominal, not discounted, and exclude tax effects and the opportunity cost of using the lump sum. Recast availability, minimum principal payments, and fees depend on the lender and loan type.
Common questions
Does a mortgage recast change my interest rate or payoff date?+
In this calculator, neither changes. The recast spreads the reduced principal balance over the same remaining term at the same rate, lowering the required monthly principal-and-interest payment.
Does making the lump-sum payment automatically lower my required payment?+
Usually not. An extra principal payment generally reduces interest and can shorten repayment while leaving the required payment unchanged. You must arrange an eligible recast with your servicer to have the required payment recalculated.
Does the $250 recast fee increase the new monthly payment?+
No. This calculator assumes the fee is paid separately, so it reduces net interest savings but does not increase the balance used to calculate the $1,546.32 recast payment.
Are the reported savings a comparison against making the same lump sum without recasting?+
No. The $37,066.17 compares the lump sum plus recast against making no lump sum and continuing the original schedule. Making the same lump sum without recasting, while maintaining the original payment, generally pays the loan off sooner and saves more interest than reducing the payment through a recast.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
Further reading
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Results are estimates for informational purposes and are not financial, medical or legal advice.