What Is a Mortgage Recast?
A mortgage recast (or reamortization) is when you make a large lump sum payment toward your principal, and your lender recalculates your monthly payment based on the new, lower balance.
🔄 How Recast Works:
- 1. You make a lump sum payment (usually $5,000-$10,000 minimum)
- 2. You request a recast from your lender
- 3. You pay a small fee ($150-$500)
- 4. Lender recalculates your payment based on new balance
- 5. Your monthly payment drops, but rate and term stay the same
📊 Recast Example
| Before Recast | After Recast | |
|---|---|---|
| Loan Balance | $350,000 | $300,000 |
| Interest Rate | 4.5% | 4.5% (same) |
| Remaining Term | 25 years | 25 years (same) |
| Monthly Payment | $1,945 | $1,667 |
| Monthly Savings | — | $278/month |
Lump sum: $50,000 | Recast fee: $250 | Result: $278/month savings = $3,336/year
Recast vs Refinance: Complete Comparison
| Factor | 🔄 Recast | 🏠 Refinance |
|---|---|---|
| Cost | $150-$500 | $3,000-$10,000+ |
| Interest Rate | Stays the same | Can change (up or down) |
| Loan Term | Stays the same | Resets (or changes) |
| Credit Check | No | Yes |
| Appraisal | No | Usually yes |
| Time to Complete | 1-2 weeks | 30-45 days |
| Paperwork | Minimal | Full application |
| Lump Sum Required | Yes ($5K-$10K min) | No |
When to Choose Each Option
🔄 Choose RECAST When:
- ✅ Your current rate is lower than today's rates
- ✅ You have a lump sum to apply ($5K-$10K+)
- ✅ You want to lower payments without closing costs
- ✅ You want to keep your current loan terms
- ✅ You don't want a credit check or appraisal
- ✅ You want it done quickly (1-2 weeks)
🏠 Choose REFINANCE When:
- ✅ Rates dropped 0.75%+ from your current rate
- ✅ You want to change your loan term (30→15 years)
- ✅ You want to switch loan types (ARM→fixed)
- ✅ You want to tap home equity (cash-out refi)
- ✅ You want to remove PMI
- ✅ You don't have a lump sum to apply
📊 Not Sure Which Is Better?
Check today's refinance rates. If they're 0.75%+ lower than your current rate, refinancing might save more.
Check Today's Rates →Mortgage Recast Requirements
✅ Typical Requirements:
- • Minimum lump sum: $5,000-$10,000 (varies by lender)
- • Recast fee: $150-$500
- • Loan type: Conventional loans (FHA/VA usually NOT eligible)
- • Current on payments: No late payments
- • Loan age: Some lenders require 12+ months of payments
⚠️ Loans That Usually CAN'T Be Recast:
- ❌ FHA loans
- ❌ VA loans
- ❌ USDA loans
- ❌ Some jumbo loans
If you have one of these, refinancing may be your only option.
Frequently Asked Questions
What is a mortgage recast?
A recast is when you make a lump sum payment toward principal, and your lender recalculates your monthly payment based on the new balance. Your rate and term stay the same, but your payment drops.
What's the difference between recast and refinance?
Recast: Same loan, same rate, lower payment. Costs $150-$500. Refinance: New loan, potentially new rate and terms. Costs $3,000-$10,000+. Recast is simpler and cheaper if you want to keep your current rate.
How much do you need to recast?
Most lenders require $5,000-$10,000 minimum. The recast fee is typically $150-$500. Contact your lender to confirm their specific requirements.
Can I recast an FHA or VA loan?
Generally no. FHA and VA loans typically cannot be recast. If you have a government-backed loan and want to lower your payment, refinancing is usually your only option.
🏠 Ready to Lower Your Payment?
Compare refinance rates to see if you'd save more with a new loan, or contact your lender about recasting.
Compare Refinance Rates →Related Guides
Sarah Mitchell
Senior Mortgage Strategist • 12+ Years Experience
Sarah helps homeowners optimize their mortgages through recasting, refinancing, and payment strategies.