A recast is one of the least-known ways to lower a mortgage payment: you make a large one-time principal payment, the lender re-amortizes the loan, and your monthly bill drops — all without changing your rate or your payoff date. This calculator shows the new payment and interest saved, and puts a recast head-to-head against the two moves people confuse it with: refinancing and simply making an extra payment.

How a recast works

Use the note interest rate, not an APR including fees. Enter an exact whole number of remaining months; the convenience editor accepts whole years plus 0–11 additional months.

The principal event happens now, before the next payment. A cash-paid fee increases cash committed; a financed fee increases the new loan balance and its interest. Fee financing requires lender approval. Principal applied is not a financing cost.

Recast vs refinance vs extra payments

Choose equal initial cash or the same principal reduction. Equal-cash comparisons allocate fees before principal; same-principal comparisons disclose different initial cash. Compare interest plus fees and remaining debt at one exit month. Lifetime totals can cover different payoff dates.

Keeping the old payment after reducing principal normally repays sooner and costs less interest than paying the lower recast minimum. Zero-rate loans have zero interest in both cases. The final actual payment is limited to the remaining principal plus interest.

Eligibility, limits, and the invest-instead question

Eligibility, minimum, fee financing and timing require lender confirmation. The estimates cover principal and interest only.

Investment comparisons use the same initial cash and monthly commitment. Unused initial cash is invested immediately; monthly payment differences are invested at month end. An effective annual return becomes a monthly return using (1+i)^(1/12)−1. Account value less outstanding debt is shown at the same exit month. Returns are uncertain.