This mortgage recast calculator estimates the payment after a lump-sum principal reduction is re-amortized over your remaining loan term. It shows payment relief, remaining interest, the recast fee's recovery period and a comparison with keeping your old payment after the same lump sum.
The choice is partly about monthly cash flow. Paying down principal saves interest relative to doing nothing. Recasting then spreads the smaller balance across the remaining term; keeping the larger old payment generally repays that same reduced balance faster. The tool displays both paths rather than attributing all lump-sum savings to the recast itself.
How to use the mortgage recast calculator
- Find the current principal balance before the proposed extra payment. Do not use the original loan amount.
- Enter the existing annual note interest rate. Use the rate charged on principal, not APR including financing costs.
- Enter the whole number of scheduled payments remaining. A 30-year loan several years into repayment does not have 360 months left.
- Enter the amount that will actually be applied to principal and any separately paid recast fee.
- Optionally add escrow or other monthly housing charges for a total-budget view. They are held constant in this comparison.
- Compare the lower-payment path with the old-payment path, and inspect the estimated monthly schedule.
The current payment is calculated from the entered balance, rate and remaining term. It should be close to principal and interest on a standard fixed-rate loan without prior off-schedule reductions. If your actual payment differs materially because of earlier extra payments, modifications or timing, get the servicer's specific recast quote rather than treating the modeled comparison as exact.
Mortgage recast formula
Let B be the current balance, L the lump-sum principal payment, n the remaining months and r the monthly note rate. The new balance is B − L. The new monthly payment is:
new payment = (B − L) × r ÷ [1 − (1 + r)^(−n)]
Here r = annual percentage rate on principal ÷ 1200. At a zero note rate, divide the reduced balance by the remaining months instead. The calculator does not restart the loan at its original term, roll the recast fee into principal or change the interest rate.
The schedule computes each month's interest from its opening balance, then applies the rest of the payment to principal. The last payment is capped at the outstanding balance plus that month's interest. Calculations retain full precision until display, so servicer rounding, daily accrual conventions and processing dates can create small differences.
Worked example: $300,000 balance and $50,000 principal payment
Assume 6% interest and 300 payments remaining, or 25 years. A $50,000 principal payment leaves $250,000.00 to amortize. The example's $250 recast fee is paid separately; it is not a lender quote.
| Result | Amount |
|---|---|
| Current modeled principal and interest | $1,932.90 |
| Recast principal and interest | $1,610.75 |
| Monthly reduction | $322.15 |
| Cash committed now: lump sum plus fee | $50,250.00 |
| Recast payment plus unchanged $600 other charges | $2,210.75 |
| Fee divided by monthly reduction | 0.78 months |
The modeled principal-and-interest reduction is proportional to the balance reduction when rate and term stay fixed. Paying 1/6 of this balance removes 1/6 of the modeled payment. Taxes, insurance and other charges do not fall by the same fraction just because the principal balance is lower.
Recast vs keep the old payment after the same lump sum
Compare three paths from today. The first makes no extra payment; the second applies the lump sum and adopts the recast payment; the third applies the same lump sum but continues the old principal-and-interest amount.
| Path | Monthly P&I | Remaining interest | Payoff time |
|---|---|---|---|
| No lump sum | $1,932.90 | $279,871.26 | 25 years |
| Lump sum + recast | $1,610.75 | $233,226.05 | 25 years |
| Lump sum + old payment | $1,932.90 | $153,213.95 | 17 years, 5 months |
The recast path saves $46,395.21 relative to no lump sum after subtracting the $250 fee, without discounting future dollars. Keeping the old payment after the lump sum pays off 91 months sooner and reduces interest by a further $80,012.10 relative to paying only the recast amount.
The larger payment is a larger monthly commitment, so that comparison is not a free additional return. If a servicer allows continued extra payments after recasting, paying the old amount can follow the same principal path while preserving a lower contractual minimum, subject to processing and fees.
How different lump sums affect the payment
The following scenarios keep the current balance, rate and remaining term unchanged. They illustrate the payment effect only; they are not suggested amounts to withdraw from savings.
| Principal payment | New P&I | Monthly reduction |
|---|---|---|
| $10,000.00 | $1,868.47 | $64.43 |
| $25,000.00 | $1,771.83 | $161.08 |
| $50,000.00 | $1,610.75 | $322.15 |
| $75,000.00 | $1,449.68 | $483.23 |
| $100,000.00 | $1,288.60 | $644.30 |
Moving cash into home equity reduces liquid savings. The fee-recovery calculation considers only the fee and monthly relief; it does not include lost investment returns, taxes on withdrawing funds, emergency liquidity or the cost of accessing that equity again.
Recast vs refinance and servicer requirements
A recast changes the payment on the existing loan after a principal reduction. A refinance replaces the loan and can change rate, term and financing costs. This page does not quote refinance rates or assume either option is better for your finances.
Fannie Mae's servicing guidance describes principal curtailments and the documentation used for requested re-amortization. Chase's recast guidance explains the payment-versus-interest tradeoff and excludes FHA, VA and USDA loans from its option. Neither establishes a universal fee or minimum for every servicer.
- Confirm the specific loan's eligibility, including investor and loan-type restrictions.
- Ask for the required principal reduction, fee, timing and any account-status conditions.
- Verify how to designate the extra amount as a principal payment.
- Ask when the new payment becomes effective and continue the currently required payments until then.
- Confirm escrow and mortgage-insurance treatment separately; this model holds other charges fixed.
Common mistakes and calculator limits
- Using the original 30-year term. Enter remaining months, not the number at origination.
- Calling the full housing payment P&I. Taxes, insurance and other charges are separate.
- Assuming extra principal automatically changes the required payment. Re-amortization requires the servicer's process.
- Calling fee recovery full break-even. The lump sum is excluded from that narrow cash-flow measure.
- Using the principal balance as a full payoff. A dated payoff can include final interest and charges.
The model covers immediate, voluntary recasting of a fixed-rate, fully amortizing loan. It excludes ARM resets, interest-only periods, balloons, delinquency, deferrals and capitalized fees. If the funds come from selling a property, estimate them with the seller closing cost calculator. For a rental, carry the confirmed new debt payment into the rental cash flow calculator.
Frequently asked questions
How do I calculate a mortgage recast payment?
Subtract the lump-sum principal payment from the current principal balance, then calculate a fully amortizing payment at the same note rate over the remaining months. Use the remaining term rather than the original loan term.
How much does a $50,000 recast reduce the example payment?
For $300,000 outstanding at 6% with 300 months left, a $50,000 principal payment reduces modeled monthly principal and interest from $1,932.90 to $1,610.75, a reduction of $322.15.
Does recasting change the interest rate or loan term?
A voluntary principal-payment recast keeps the existing note rate and remaining maturity schedule. It recalculates the contractual payment on the reduced balance. This calculator covers a fixed-rate loan, not a scheduled ARM reset or negative-amortization recast.
Does a recast save more interest than keeping my old payment?
Not in the same-lump-sum comparison here. Recasting and paying the lower amount produces $233,226.05 remaining interest; keeping the old payment produces $153,213.95 and pays off in 209 months.
Is the lump sum part of the fee break-even calculation?
No. Fee recovery divides the separate recast fee by monthly payment reduction. The principal payment turns cash into home equity; the recovery figure is not repayment of that cash, a full investment break-even or an interest-return calculation.
Can FHA, VA or USDA loans be recast?
Chase's published guidance excludes FHA, VA and USDA loans from its voluntary recast option. Conventional and other loan eligibility also depends on the investor and servicer. Confirm the terms for your specific loan before sending money.
What is the minimum lump sum and fee?
Requirements vary by servicer and loan program, so this tool does not impose a universal minimum or quote a lender fee. The default $250 fee is illustrative. Enter a confirmed quote and ask whether the principal payment must be processed before the request.
Does the new payment include property tax and insurance?
The main result is principal and interest only. You can add other monthly housing charges for a budget comparison; those charges are held unchanged and can change independently of a recast.
What if the lump sum equals my principal balance?
The modeled principal is paid off and a recast is unnecessary. A real payoff can include interest and charges through a specified date, so obtain a dated payoff quote rather than sending only the displayed principal balance.
Sources & method
- Fannie Mae Servicing Guide C-1.2-01 — principal curtailments and re-amortization
- Chase — mortgage recast vs refinance, eligibility and servicer confirmation
- Chase — recast for homebuyers: remaining term and interest tradeoff
- Freddie Mac — amortization and published $135,000 loan example
- CFPB — principal and interest vs total monthly mortgage payment
- CFPB — payoff amount vs principal balance
Results are estimates for general information. Found an error? It helps everyone — see our methodology.