Mortgage Recast Calculator – Calculate New Monthly Payment After Lump Sum

Last updated: October 6, 2026

This free mortgage recast calculator shows your new monthly payment after you pay a lump sum toward principal and your lender re-amortizes the loan. It also shows what happens if you make the same lump-sum payment but keep paying your old amount, so you can see which option fits your goals.

What Is a Mortgage Recast?

A mortgage recast, also called re-amortization, happens when you pay a large lump sum toward your loan principal and ask your servicer to recalculate your monthly payment based on the lower balance. Your interest rate and your remaining loan term stay exactly the same. Because the balance is smaller, the required monthly payment drops.

Recasting is mainly offered on conventional loans. Government-backed loans (FHA, VA, and USDA) generally cannot be recast. Fannie Mae's servicing rules allow a servicer, after a substantial principal payment, to lower only the principal-and-interest payment by re-amortizing the balance at the current rate over the remaining term.

How the Calculation Works

The new payment uses the standard fixed-rate amortization formula with three inputs: the balance after your lump sum, your existing interest rate, and the number of payments left. Nothing else about the loan changes. Escrow for property taxes, insurance, and mortgage insurance is not affected by a recast, so the calculator adds it on top of principal and interest only if you enter it.

How to Use This Calculator

Choose From original loan if you know your original amount, term, and how many payments you have made; the calculator works out your current balance. Choose From my statement if you would rather copy the unpaid principal balance and remaining term from your latest mortgage statement. Then add your interest rate, the lump sum you plan to pay, your servicer's recast fee, and, optionally, your monthly escrow.

The results compare three options: doing nothing, paying the lump sum and recasting, and paying the lump sum but continuing your old payment. You will see each option's monthly payment, payoff date, remaining interest, and savings, plus how many months it takes for the interest savings to cover the recast fee.

Example

A $200,000 loan at 5% for 30 years has a principal-and-interest payment of about $1,074. After 10 years the balance is about $162,684, with about $94,990 of interest still to come. Now suppose you pay $50,000 toward principal:

• Recast: the payment drops to about $744 a month for the remaining 20 years, and remaining interest falls to about $65,796, a saving of roughly $29,200.
• Keep paying $1,074: the loan is paid off in about 11 years and 7 months instead of 20 years, and remaining interest falls to about $35,795, a saving of roughly $59,200.

The recast gives you about $330 a month of breathing room. Keeping the old payment saves about twice as much interest and clears the loan more than eight years sooner.

Quick Reference: What Different Lump Sums Do

For a $350,000 balance at 6.25% with 26 years left (current payment about $2,272):

A handy rule of thumb: your principal-and-interest payment falls by about the same percentage as the share of your balance you pay down. Paying 10% of the balance cuts the payment by about 10%.

Recast vs. Keep Paying vs. Refinance

Recast Requirements

Rules are set by whoever owns your loan and by your servicer, so they vary. Common requirements include:

• A conventional loan. FHA, VA, USDA, and other Ginnie Mae loans are generally not eligible, and some servicers also exclude interest-only and option ARM loans.
• A minimum principal payment, commonly $5,000 to $10,000.
• A one-time recast fee, commonly $150 to $500.
• A loan that is current and in good standing.
• Sometimes a waiting period after closing and a limit of one recast per 12 months.

Here is what a few large servicers publish in their own recast documents:

Servicer rules change. Treat this table as a starting point and confirm current requirements with your own servicer before sending any money.

How to Request a Mortgage Recast

1. Find out who owns and services your loan. Your servicer's name is on your statement; ask whether your loan's investor allows recasts.
2. Ask for the rules in writing: the minimum principal payment, the fee, any waiting period, and how long processing takes.
3. Submit the recast request and pay the fee as your servicer instructs.
4. Make the lump-sum payment, marked as principal only. Some servicers want it before the request; others after approval.
5. Sign the recast agreement if one is required, then check that your next statement shows the new, lower payment.

When Does Recasting Make Sense?

Recasting is most useful when you have a lump sum available (for example from a bonus, inheritance, or the sale of a previous home) and you want a lower required monthly payment without giving up your current rate. It is especially attractive when market rates are higher than your existing rate, because refinancing would mean taking a higher rate. Because there is no new loan application, your credit score does not affect a recast.

When Recasting May Not Be the Best Move

• Your rate is well above today's rates. A recast never lowers your rate; a refinance might.
• Your goal is to be debt-free sooner. Paying the lump sum and keeping your old payment saves more interest.
• Your lump sum barely clears the minimum. The payment drop may be too small to be worth the fee and paperwork.
• Your emergency fund is thin. Money put into home equity is hard to get back without borrowing against the house.
• You have higher-interest debt. Paying off credit cards first usually saves more.

Before deciding, compare current rates from a reliable source such as Freddie Mac's weekly mortgage rate survey. If you are still paying PMI, check whether your lump sum would also let you remove PMI, and use our Mortgage Payoff Calculator to test ongoing extra payments.

Summary

A mortgage recast lowers your monthly payment by applying a lump sum to principal while keeping your rate and payoff date unchanged. Keeping your old payment after the same lump sum saves more interest and pays the loan off sooner. Use the calculator above to compare both with your own numbers before you contact your servicer.

This calculator provides estimates for informational purposes only and is not financial advice. Your servicer's figures may differ.