Housing
Mortgage Payment Calculator
Calculate your monthly mortgage payment including principal, interest, property taxes, homeowners insurance, and PMI with verified 2026 statutory rates.
2026 Statutory Rates
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Mortgage Recast Calculator
Calculate your new lower monthly mortgage payment after making a lump-sum principal payment and reamortizing your loan. Compare your ongoing payment savings with refinancing without altering your interest rate or loan term.
Quick Answer: A mortgage recast (also known as loan reamortization) applies a lump-sum payment directly to your remaining loan balance and recalculates your monthly principal and interest payment using your existing interest rate and original remaining term. Unlike refinancing, a recast does not replace your mortgage, require a new appraisal, or change your maturity date. For example, applying a $50,000 lump sum to a $300,000 balance at a 6.5% interest rate with 25 years (300 months) remaining reduces your monthly payment from $2,025.62 to $1,688.02—saving $337.60 every month and $51,281.07 in total lifetime interest.
Decision Guide
Mortgage Recast vs. Refinance: Which Is Better?
Both a mortgage recast and a mortgage refinance can lower your monthly mortgage payment, but they work through entirely different mechanisms with vastly different costs and underwriting requirements.
✔ Mortgage Recast
- Keeps Existing Terms: You retain your exact current fixed interest rate and remaining loan maturity date.
- Minimal Costs: Usually only a servicer administrative fee, if your servicer charges one — no closing costs, appraisal, or requalification.
- No Re-Underwriting: No home appraisal, income documentation, credit checks, or closing costs required.
- Best If: You locked in an exceptionally low interest rate, received a windfall or bonus, and want immediate monthly cash flow relief without replacing your loan.
🔄 Mortgage Refinance
- Replaces the Loan: Creates a brand new mortgage with a new market interest rate and a brand new term (e.g. 15 or 30 years).
- Closing Costs: Involves standard mortgage closing costs, loan origination fees, title insurance, and appraisal charges.
- Full Qualification: Requires income verification, debt-to-income underwriting, credit score pulls, and an updated appraisal.
- Best If: Current market interest rates are noticeably lower than your current rate, or you want to shorten your term from 30 to 15 years.
If prevailing interest rates have dropped significantly below your note rate, or if you want to alter your loan duration, explore our Mortgage Refinance Calculator to compute your break-even month and lifetime interest savings.
Primary Source Verified
Last reviewed: October 2026
Calculation Methodology: Mortgage Recast Calculator
Mathematical Formula
r = Annual Rate / 12 | n = Remaining Years × 12 | F = [r(1+r)^n] / [(1+r)^n − 1] | Current P&I = B × F | New Balance B' = B − Lump Sum | New P&I = B' × F | Monthly Saving = Current P&I − New P&I | Interest Saved = (Current P&I × n − B) − (New P&I × n − B')
1. Monthly Amortization Factor: The monthly interest rate is r = Annual Rate ÷ 12, and the remaining term in months is n = Remaining Years × 12. The standard level-payment amortization factor is F = [r(1 + r)n] ÷ [(1 + r)n − 1].
2. Current Monthly Payment: Current P&I = B × F, where B is the current outstanding principal balance.
3. New Principal Balance: New Balance B' = B − Lump-Sum Payment.
4. New Monthly Payment: New P&I = B' × F. Because the interest rate r and remaining term n remain identical, the monthly payment scales downward in exact proportion to the reduced loan balance.
5. Monthly & Lifetime Interest Savings: Monthly Payment Saving = Current P&I − New P&I. Total Interest Saved = (Current P&I × n − B) − (New P&I × n − B'). Net Savings = Total Interest Saved − Servicer Recast Fee (when a fee is entered).
Why the Monthly Payment Drops While the Term Stays the Same
When you make extra principal payments during regular mortgage servicing without recasting, your monthly payment remains identical, but the extra principal accelerates debt payoff and shortens your remaining term. A mortgage recast does the exact opposite: the smaller principal balance is spread across the same remaining n months at the same interest rate r, recalculating a permanently lower monthly required payment while leaving your final loan maturity date completely unchanged.
Model Boundaries & Scope Limitations
- Principal & Interest Only: A mortgage recast modifies only the principal and interest (P&I) portion of your payment; property taxes, homeowners insurance, HOA dues, and escrow disbursements are unchanged.
- Fixed Interest Rates & Terms: Recasting preserves your contractual interest rate and payoff date. It does not lower your interest rate (which requires refinancing) nor reset or extend your loan term.
- Servicer Fees & Minimums: Recast administrative fees and minimum lump-sum requirements are set by each individual mortgage servicer and vary widely. Some servicers charge no fee, while others assess an administrative processing charge; similarly, servicers often require a minimum principal curtailment to qualify. PlainFig quotes no fee or minimum figure—the optional fee input exists precisely so you can enter your servicer's exact fee, and all minimum requirements must be confirmed directly with your servicer.
- Loan-Type Eligibility: Whether your loan can be recast depends on your loan type and servicer — check with your servicer. Under Fannie Mae Servicing Guide Section C-1.2-01 (Processing Additional Principal Payments), conventional conforming mortgages may be reamortized upon a substantial principal curtailment, while government-insured loans (FHA, VA, USDA) are generally ineligible under program guidelines.
- Non-Quoted User Rates: Interest rates and fees are entered directly by the user. PlainFig quotes no proprietary rates or lender pricing.
Disclaimer: Informational calculation only. A mortgage recast requires formal servicer approval, execution of a loan modification/recast agreement, and verification of loan eligibility. Does not constitute lending or legal advice.
Verified Worked Example (Benchmark)
Worked Example (Benchmark D — First-Load Defaults):
Inputs: $300,000 balance, 6.50% interest rate, 25 years remaining (300 months), $50,000 lump-sum principal reduction, $0 servicer fee.
Current Monthly Payment: $2,025.62 (Old total interest over 25 years: $307,686.45).
New Monthly Payment: $1,688.02 (New total interest over 25 years: $256,405.37).
Monthly Cash Flow Savings: $337.60 per month.
Total Lifetime Interest Saved: $51,281.07.
Loan Maturity & Payoff Date: Unchanged (exact same 25-year schedule / 300 months).
Primary Statutory Sources & Authorities
- Fannie Mae Servicing Guide (Section C-1.2-01: Processing Additional Principal Payments) — Guidelines on reamortization and principal curtailments on conventional single-family mortgages.
- Consumer Financial Protection Bureau (CFPB) — Federal guidance on loan structures, monthly payment amortization, and mortgage refinancing alternatives.
Frequently Asked Questions
Primary source guidance on rules, formulas, and regulations.
A mortgage recast, also known as loan reamortization, occurs when a borrower pays a substantial lump sum toward their principal balance and the mortgage servicer recomputes the monthly payment based on the new, lower balance. The interest rate and the remaining loan term remain exactly the same, resulting in lower monthly payments without changing your loan terms or payoff date.
When you make extra principal payments during your loan, your required monthly payment stays the same, but you pay off the mortgage faster and shorten your loan term. A recast does the opposite: it applies the lump sum to lower your required monthly payment going forward while keeping your original loan term and payoff date identical.
No. A standard mortgage recast preserves your existing maturity date. Because your new lower payment is calculated over your exact remaining term, your final loan payoff date does not change.
It depends on your current interest rate and goals. A recast is ideal if you already have a low interest rate, have a lump sum of cash, and want lower monthly payments with minimal fees and no closing costs, appraisal, or credit check. A refinance replaces your loan entirely, which makes sense if prevailing market interest rates are significantly lower than your current rate or you want to change your loan term from 30 to 15 years. You can use our Mortgage Refinance Calculator to compare potential savings.
Recast costs and requirements are servicer-specific. Your servicer sets its own administrative fee (if any) and its own minimum lump-sum requirement — enter your servicer's exact fee in the optional fee input, and check directly with your servicer for their requirements.
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