How to Recast a Mortgage

The Short Answer

First, ask your mortgage servicer whether your loan can be recast and request its written requirements. Then make the required principal payment exactly as instructed, submit any agreement and fee, and continue paying your current bill while the request is processed. A completed recast keeps the existing interest rate and remaining term but recalculates the required principal-and-interest payment on the lower balance. Do not assume that a large extra payment will trigger this change automatically.

Before You Start: 4 Things You Need to Know

1. Know your servicer. Use the company and contact details on your latest mortgage statement, which may differ from the lender that originally made the loan.
2. Know your loan type. Recasting is usually available only for eligible conventional mortgages, not government-backed FHA, VA, or USDA loans.
3. Keep cash needs separate. A principal payment becomes home equity and is not readily available for bills or emergencies.
4. Estimate, then verify. A mortgage recast calculator can model the payment, but only the servicer can issue the official amount and effective date. If the concept is still unfamiliar, start with what is a mortgage recast.

How to Recast Your Mortgage, Step by Step

Step 1: Confirm Your Loan Qualifies

Find the loan type on your closing papers or ask the servicer. Confirm that the mortgage is current and ask whether investor rules, a recent modification, payment history, or a previous recast affects eligibility. Ask the representative to identify the mortgage investor by name. Do this before sending money. Fannie Mae's servicing guide describes a formal re-amortization process after a substantial principal curtailment for eligible loans, but the company collecting your payment must confirm whether that guidance applies to your mortgage. Source: Fannie Mae Servicing Guide.

Step 2: Ask Your Servicer for Their Recast Rules and Fee

Call the number on your statement or send a secure account message. Have your loan number ready, but do not include sensitive information in ordinary email. Ask for written instructions so you can match the required payment amount, delivery method, form, and deadline.

“I want to request a mortgage recast after making a principal payment. Is my loan eligible? What minimum principal amount and fee apply, how should I send and label the funds, and do all borrowers need to sign a form? Please also tell me the processing time, the estimated effective date, and how I will receive the new payment and amortization schedule in writing.”

Step 3: Make the Lump-Sum Principal Payment

Follow the servicer's delivery instructions exactly. Make sure the payment is designated for principal reduction rather than treated as an early regular payment, and keep the confirmation number or receipt. Do not subtract the lump sum from the balance yourself when deciding what monthly amount to send. Until the servicer completes the recast, pay the full amount shown as due on each statement. If the recast request and the principal payment use separate channels, confirm that both were received and connected to the same request.

Step 4: Get the Recast Confirmed in Writing

Complete and return the servicer's agreement by its deadline, including every required borrower's signature. Review the stated unpaid principal balance, interest rate, remaining term, new principal-and-interest payment, effective date, and fee. Fannie Mae's guide instructs servicers to complete and provide the borrower an Agreement for Modification, Re-Amortization, or Extension of a Mortgage for covered loans. Your document may have a different name, but written confirmation is the evidence that the payment schedule—not merely the balance—has changed. Save a copy with your other mortgage records.

Step 5: Check Your New Payment and Amortization Schedule

When the first revised statement arrives, compare it with the agreement. Verify the beginning balance, note rate, number of payments remaining, principal-and-interest amount, escrow amount, and automatic-payment setting. Taxes and insurance do not fall just because principal and interest do; the CFPB explains that the total mortgage payment can include those separate amounts. Source: Consumer Financial Protection Bureau. Contact the servicer promptly if the statement or bank draft does not match the written recast terms. Download and retain the revised amortization schedule for reference.

What a Recast Costs

The principal payment is not a fee; it reduces what you owe. A separate administrative fee may apply, and policies vary. Bank of America currently publishes a $5,000 minimum principal curtailment and no recast fee for eligible loans. Rocket Mortgage currently publishes a $10,000 minimum and a $250 fee. These are provider examples, not universal prices, so obtain the amount for your loan in writing. Source: Bank of America mortgage FAQs; source: Rocket Mortgage recast policy.

How Long a Recast Takes

There is no single industry deadline. Rocket Mortgage says its recast process can take 45–60 days. Bank of America says the new payment can begin the next month when the request and funds arrive by the 15th, or two months later when they arrive on or after the 16th. Your timing may differ, so keep making the billed payment until written confirmation takes effect. Source: Rocket Mortgage; source: Bank of America.

When a Recast Is Not Possible

FHA, VA, and USDA mortgages typically cannot use a standard voluntary recast; the option is usually limited to eligible conventional loans. Even then, each investor and servicer sets its own rules. Minimum principal reductions commonly fall around $5,000–$10,000 in published provider policies, and frequency limits differ: Bank of America currently permits one request in a rolling 12-month period, while Rocket Mortgage says it does not set a lifetime count. A delinquent loan, recent modification, insufficient payment, or unsupported loan program can also prevent approval. Source: Bank of America; source: Rocket Mortgage.

Should You Recast or Refinance?

A recast may fit when you want to keep the existing rate and maturity date and only need a lower required payment after reducing principal. A refinance replaces the loan and may change the rate, term, loan program, or borrowers, but it requires new approval and can include closing costs.

Use the written recast terms and a Loan Estimate for any refinance offer to compare like with like. Our mortgage recast vs refinance guide explains the decision points without assuming either option is right for every homeowner.