Mortgage Recast Savings Estimator

How to calculate recast savings?

A recast keeps your term and rate the same but adjusts the monthly payment based on your new, lower principal balance.

Formula: Monthly Savings = Current Monthly Payment × (Lump Sum Payment / Current Balance)

Using the recast calculator: an example

Example: A $200,000 balance at 6% with a $20,000 lump-sum payment and a $250 fee.

Step-by-step calculation:

• Calculate the reduction ratio ($20,000 / $200,000 = 10%)
• Multiply current payment by 10% to find monthly savings
• Divide $250 fee by monthly savings to find the break-even month

Frequently Asked Questions

Is a recast better than a refinance?

Recasting is cheaper and keeps your current interest rate, which is ideal if your current rate is lower than market rates.

Does recasting shorten my loan term?

No, it only reduces the monthly payment amount; your original maturity date remains the same.

Can I recast any mortgage?

Most conventional loans allow recasting, but FHA and VA loans typically do not support this feature.