Mortgage Recast Calculator

01What This Calculator Shows

The calculator models a common fixed-rate mortgage recast: you make a one-time payment directly toward principal, and the servicer re-amortizes the smaller balance over the months already left on the loan. The interest rate stays the same. The scheduled payoff date also stays the same. Because less principal remains, the required monthly principal-and-interest payment falls.

The four headline results answer different planning questions. “New monthly principal & interest” estimates the required loan payment after recasting. “Less per month” compares that estimate with the current payment you entered. “Estimated payoff date” advances the remaining number of months from today; use the maturity date on your note or statement when you need an exact date. “Total interest saved” compares the remaining scheduled interest before and after the lump-sum payment, assuming both paths run for the same remaining term.

The math follows standard amortization, but a servicer’s final figure can differ because of the effective date, rounding, posting order, payment history, or loan-specific rules. Fannie Mae’s servicing guidance describes re-amortization after a substantial principal curtailment using the current unpaid principal balance, current interest rate, and remaining loan term. That is the core model used here. Source: Fannie Mae Servicing Guide.

02What a Recast Does to Your Loan

A mortgage recast, sometimes called re-amortization, is a recalculation of the payment schedule on an existing loan after the borrower reduces the principal balance. It is not a new mortgage. You keep the same loan account, interest rate, and remaining term. The servicer simply calculates the payment needed to amortize the new balance by the original maturity date.

That distinction matters. Sending extra principal by itself reduces the amount owed and the interest that can accrue, but it usually does not reduce the required payment shown on the next statement. The formal recast is the administrative step that lowers the contractual principal-and-interest payment. Read our plain-English guide to what is a mortgage recast before contacting your servicer.

The Consumer Financial Protection Bureau explains that a typical fixed-rate mortgage payment gradually shifts from mostly interest toward mostly principal as the balance falls. A lump-sum payment moves the balance down immediately. The recast then spreads that lower balance over the remaining schedule. Source: Consumer Financial Protection Bureau.

03Recast vs. Paying Principal Early

A recast and an extra principal payment begin with the same action: money is applied to the mortgage balance. The difference is what happens to the required payment afterward. With principal prepayment alone, the scheduled payment generally stays unchanged, so more of each later payment reaches principal and the loan can finish sooner. With a recast, the servicer lowers the required payment and keeps the existing payoff schedule.

Neither option is automatically better. Recasting emphasizes monthly cash flow; continuing the old payment emphasizes speed and interest reduction. A homeowner may even recast for flexibility and voluntarily keep paying the old amount when the budget allows. Ask the servicer how additional amounts must be labeled so they are credited to principal.

04When a Recast May Be Worth It

A recast is most compelling when you already have a favorable mortgage rate, have enough cash for a meaningful principal reduction, and want a smaller required payment. One common situation is buying a new home before selling the old one, then applying sale proceeds to the new mortgage. A bonus, inheritance, or other windfall can create the same decision.

Start with the payment reduction, but do not stop there. Divide any quoted recast fee by the monthly reduction to estimate a simple fee break-even period. Then consider how long you expect to keep the loan, whether your emergency savings remain adequate, and what else the cash could do. Home equity is not the same as cash in a savings account; accessing it later may require a sale or new borrowing.

A recast may be less useful when the calculated reduction is small, you expect to sell or refinance soon, market rates are meaningfully below your current rate, or the lump sum would leave you without a comfortable reserve. It also cannot remove a borrower, change the interest rate, convert an adjustable-rate loan to a fixed rate, or provide cash out. Those goals generally require a different transaction, such as refinancing.

The result card above describes the size of the modeled payment change, not a financial recommendation. Use it as a screening tool, then compare the written terms from your servicer with your own liquidity and time horizon. For a side-by-side decision framework, see mortgage recast vs. refinance.

05Fees and Common Lender Conditions

There is no universal mortgage recast fee or nationwide minimum principal payment. Both are controlled by the servicer and the investor that owns the loan. Public lender policies illustrate that variation: Bank of America currently states that eligible loans require at least $5,000 in recent principal curtailments and that it charges no recast fee, while Chase says fees may apply and that availability is subject to loan and servicer restrictions. These are examples, not market-wide rules. Source: Bank of America mortgage FAQs; source: Chase mortgage education.

Before moving money, call the number on your mortgage statement and ask five questions: Is this loan eligible? What principal reduction is required? Is there a fee? Must the loan be current for a certain number of payments? What date will the new payment take effect? Request the answers and instructions in writing when possible.

Loan type matters. Voluntary recast programs are most often associated with eligible conventional loans. Government-backed FHA, VA, and USDA loans are commonly excluded from lender recast programs, and even a conventional loan may be ineligible because of investor rules, payment status, prior modifications, or servicing policy. Do not send a large payment on the assumption that recasting will be approved. Confirm eligibility first and verify how the funds will be applied.

Remember that only principal and interest are recalculated. The CFPB notes that a total monthly mortgage payment can also include property taxes, homeowners insurance, and mortgage insurance. A lower principal-and-interest amount may therefore produce a smaller change in the total amount drafted from your bank account. Source: Consumer Financial Protection Bureau.