Mortgage Recast Calculator
$
6%
30 yr
$
New Monthly Payment$1,498.88
Monthly Savings$299.78
Old Monthly Payment$1,798.65
Total Interest Saved$57,919.09
A mortgage recast lowers your monthly payment by applying a large lump sum to principal and then re-amortizing the smaller balance over the same remaining term at the same interest rate. Unlike a refinance there are no new closing costs and the rate does not change. This calculator shows the new payment, the monthly saving, and the interest you avoid over the rest of the loan.
Formula
payment = P × i × (1 + i)^n / ((1 + i)^n − 1), with P reduced by the lump sum
- P
- Loan balance (original, then reduced by the lump sum)
- i
- Monthly interest rate (annual rate / 12)
- n
- Months remaining on the loan
How it works
- Enter your current loan balance, interest rate, the number of years left on the loan, and the lump-sum principal payment you plan to make.
- The tool computes the standard amortizing payment on the original balance, subtracts your lump sum, and re-amortizes the reduced balance over the same remaining months at the same rate.
- Interest saved is the difference between the total interest left on the original schedule and the total interest on the recast schedule.
Worked example
A $300,000 balance at 6% with 30 years left, recast with a $50,000 lump sum.
- Original payment on $300,000 at 6% over 360 months is about $1,798.65.
- New balance = 300,000 − 50,000 = $250,000.
- Recast payment on $250,000 over the same 360 months is about $1,498.88.
The payment drops to about $1,498.88, saving roughly $300 a month.
Frequently asked questions
- How is a recast different from a refinance?
- A recast keeps your existing loan, rate, and remaining term and only re-amortizes a lower balance after a lump sum, usually for a small fee. A refinance replaces the loan entirely, can change the rate and term, and involves closing costs.
- Does recasting shorten my loan term?
- No. A standard recast keeps the same payoff date and lowers the monthly payment. If you want to pay off sooner, keep paying the old amount or make extra principal payments instead.
- Will recasting lower my interest rate?
- No. The rate stays the same. You save interest only because the balance is smaller, not because the rate changes. To change the rate you would need to refinance.