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What is a Mortgage Recast?

A mortgage recast is when your lender recalculates your monthly mortgage payment based on a large, one-time payment you make toward your principal balance. The key point is that your loan term and interest rate usually stay the same; only your monthly payment amount changes.

For example, suppose you owe $250,000 on your mortgage. You receive a bonus, inheritance, or sell another property and decide to put $50,000 toward your mortgage. After this, your lender “recasts” the loan. Your balance drops, and your new monthly payments are recalculated based on the lower amount, while keeping your existing interest rate and term.

It’s different from refinancing, which means replacing your old mortgage with a new one — often with a new term and interest rate.

Why Use a Mortgage Recast Calculator?

You might be wondering, “How much can I actually save with a recast?”
That’s where a mortgage recast calculator comes in.This handy online tool helps you:

• Estimate your new monthly payment after a lump-sum payment
• See how much interest you could save over the remaining loan term
• Decide if recasting makes financial sense for your situation

By entering a few numbers (current loan balance, recast payment, interest rate, and remaining term), the calculator shows what your payments could look like after recasting.

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How a Mortgage Recast Calculator Works (Step by Step)

Using a mortgage recast calculator is easier than it sounds. Here’s how to do it:

1. Enter your current mortgage balance
   This is the amount you still owe on your mortgage.
2. Enter your interest rate
   This is the annual interest rate on your current loan. Note: most lenders only allow recasting on fixed-rate mortgages.
3. Enter your remaining loan term
   How many years you have left to pay off your mortgage.
4. Enter the lump-sum recast payment
   This is the extra amount you plan to pay toward your principal.
5. Calculate
   The calculator then shows your new monthly payment based on the reduced balance.

For example, suppose:

• Current loan balance: $250,000
• Interest rate: 4%
• Remaining term: 25 years
• Recast payment: $50,000

Your new balance after recasting is $200,000. The calculator uses this new balance to calculate what your monthly payment will be for the remaining 25 years.

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When Does a Mortgage Recast Make Sense?

A recast isn’t for everyone. But it can be a smart option if:

✅ You have a large sum of money: Perhaps from savings, a bonus, inheritance, or selling another home.

✅ You want lower monthly payments: Rather than shortening the loan term, recasting makes your payments more affordable.

✅ You don’t want to refinance: Maybe your current rate is already low, or refinancing costs (closing costs, appraisal, etc.) seem too high.

✅ You plan to keep the same home and mortgage: Recasting is useful if you’re staying put and not planning to sell or refinance soon.

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Benefits of Using a Mortgage Recast Calculator

Using a calculator before making financial decisions offers several benefits:

• Clarity: See exactly how much your payment could drop.
• Control: Understand your potential savings and whether it fits your goals.
• Comparison: Compare recasting with other options like refinancing or making extra payments without recasting.
• Planning: Make an informed decision about using your lump-sum payment.

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Mortgage Recast vs. Refinance: What’s the Difference?

Many homeowners confuse recasting and refinancing. Here’s a simple breakdown:

	Mortgage Recast	Refinance
What it does	Lowers monthly payment by reducing principal	Creates a brand-new loan, possibly with new term and rate
Rate change	Same rate	May change
Loan term	Same term	Can change
Cost	Usually low fee (e.g., $150-$500)	Higher closing costs (2-5% of loan amount)
Requires credit check?	No	Yes

If your current rate is already good, recasting may make more sense. If rates have dropped, refinancing might save more.

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Pros and Cons of Mortgage Recasting

Before deciding, it helps to know both sides.

✅ Pros:

• Lower monthly payments
• Keep existing interest rate and term
• Lower cost than refinancing
• No need for new credit check or appraisal (usually)

❌ Cons:

• Need to pay a large lump sum
• Doesn’t shorten the loan term (unless you also make extra payments)
• Not all lenders allow recasting
• Doesn’t work on all loan types (usually not on government loans like FHA/VA)

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Common Questions About Mortgage Recast Calculators

1. Is a mortgage recast calculator free to use?

Yes! Most calculators online are free and take only a few minutes.

2. Can I recast anytime?

Only if your lender allows it. Some lenders set rules on timing, minimum payment amount (often $5,000+), and how often you can recast.

3. Will recasting lower my interest rate?

No, recasting keeps your existing rate. It only recalculates payments based on the new balance.

4. Does recasting hurt my credit?

No. In fact, lowering your balance might help your debt-to-income ratio.

Practical Tips Before You Recast

• Check with your lender first: Make sure recasting is an option and ask about fees.
• Compare with refinancing: Use online calculators for both options.
• Don’t empty your savings: Keep enough for emergencies.
• Think long-term: Lower payments are nice, but sometimes keeping the same payment and paying off early saves more interest.

How to Find the Best Mortgage Recast Calculator

Not all calculators are the same. Look for:

• Easy-to-use design
• Mobile-friendly
• Clear results (new payment, balance, term)
• Option to compare old vs. new payment

Many calculator websites, banks, and financial blogs offer good tools. Some even let you save or print your results.

Is a Mortgage Recast Right for You?

A mortgage recast calculator can help you see the benefits of putting a lump sum toward your mortgage without the hassle of refinancing.

If you:

• Have a large payment to put toward your mortgage
• Like your current interest rate
• Want lower monthly payments
• Prefer to avoid the cost and paperwork of refinancing

… then recasting could be a great move. And a calculator helps you decide confidently.

Ready to see your new payment?

Try our free Mortgage Recast Calculator today and discover how much you could save!
You might be surprised how a simple step today can improve your finances for years to come.