Mortgage Recast Calculator

A mortgage recast — also called a loan re-amortization — is when you make a large lump-sum payment directly toward your principal balance, and your lender recalculates (re-amortizes) your remaining monthly payments based on that new, lower balance. Your interest rate and remaining loan term stay exactly the same. The result is a permanently lower monthly payment for the life of the loan.

To initiate a recast, contact your current mortgage servicer (the company you send your payments to) directly. The typical process involves:

1. Calling or writing to your servicer to request a recast and confirming your loan is eligible
2. Completing any required recast request forms they provide
3. Making the qualifying lump-sum principal payment
4. Paying the recast processing fee
5. Receiving your new, lower monthly payment schedule (typically effective the following month or the month after)

Keep in mind: the lump-sum payment must be applied to principal specifically — not to interest or escrow.

Minimum requirements vary by lender and loan type, but common thresholds are:

• Fannie Mae / Conventional: Typically a minimum of $5,000 or 10% of the original loan balance (some servicers require $10,000+)
• Freddie Mac / Conventional: Generally $5,000 minimum
• Jumbo loans: Minimum thresholds vary widely by lender — often $25,000 or more

Always confirm the exact minimum with your servicer before initiating the process.

Most lenders allow multiple recasts over the life of a loan, but they typically impose a waiting period between recasts — commonly 12 months. Some lenders may limit the total number of recasts (e.g., no more than two per loan). There is no universal rule; it depends entirely on your servicer's policies. If you anticipate making multiple large payments over time, ask your servicer upfront about their recast frequency limits.

Recast fees are typically very affordable compared to refinancing. Most lenders charge a flat administrative fee ranging from $150 to $500. Some lenders charge as little as $0 for certain loan programs. This is one of the biggest advantages of recasting — you get a permanently lower payment at a fraction of the cost of a refinance, which can run 2–6% of your loan balance in closing costs.

Not all loan types are eligible for recasting. In general:

• Conventional (Fannie Mae / Freddie Mac): Generally eligible ✓
• Jumbo loans: Usually eligible, depending on the lender ✓
• FHA loans: Not eligible for recast ✗
• VA loans: Not eligible for recast ✗
• USDA loans: Not eligible for recast ✗

If you have an FHA, VA, or USDA loan and want to lower your payment, a refinance may be the better path. Contact Robert Hendley to discuss your options.

No. Your interest rate and remaining loan term remain completely unchanged. A recast only reduces your monthly payment by re-amortizing the lower principal balance over the same remaining term. If you have a 6.5% rate with 24 years remaining, you will still have a 6.5% rate with 24 years remaining after the recast — you will simply owe less principal and therefore have a lower required payment each month.

Most servicers complete a recast within 30 to 60 days of receiving the lump-sum payment and the completed request. The new, lower payment typically takes effect the following billing cycle or the month after. Some lenders are faster (2–4 weeks), while others can take up to 90 days. Ask your servicer for a specific timeline when you initiate the request.

No. A mortgage recast does not require a new credit application, income verification, or credit inquiry. Because there is no hard pull on your credit report, recasting has no negative impact on your credit score. In fact, reducing your loan balance could have a modest positive effect on your overall financial profile over time.

Both strategies reduce your total interest paid, but they work differently:

• Extra principal payments (without a recast) shorten your loan term but keep your required monthly payment the same. Great if your goal is to pay off the loan faster.
• A recast keeps your term the same but immediately lowers your required monthly payment. Great if your goal is to reduce monthly cash flow obligations — for example, after retirement, a job change, or buying a new home before selling the current one.

The best choice depends on your financial goals. Reach out to Robert Hendley to talk through which approach makes more sense for your situation.