Mortgage Recasting Calculator

A recast keeps your existing loan in place. The lender accepts a lump-sum principal payment, then re-amortizes the remaining balance over the same remaining term, so your monthly payment drops but your interest rate, term, and payoff date stay exactly the same. The cost is usually a flat $150 to $500 lender fee, and there is no underwriting, appraisal, or title work. A refinance replaces the entire loan with a new one, which lets you change the rate, the term, or both, but you pay full closing costs (typically 2 to 5 percent of the loan), restart amortization, and re-qualify on income, credit, and the appraisal. Recast when rates are flat or rising and you have extra cash; refinance when rates have dropped meaningfully or you want to shorten the term.

Recasting is mostly a customer-retention play that costs the lender almost nothing. There is no underwriting, no new title insurance, no appraisal, and no re-qualification on income or credit, because the loan, rate, term, and payoff date are unchanged. The lender's servicing system just runs a fresh PMT calculation on the smaller balance and sends you a new payment notice. The flat $150 to $500 fee mostly covers the back-office work and the lender's incentive to discourage trivial $1,000 recasts. Because nothing about the borrower's risk profile changes, even borrowers who could no longer qualify for the same loan today (job loss, lower credit score, higher DTI) are still allowed to recast.

Most major US servicers (Chase, Wells Fargo, Bank of America, Rocket Mortgage, US Bank) require a minimum lump-sum payment of $5,000 to $10,000 before they will recast, plus a flat fee of $150 to $500. A few credit unions and portfolio lenders waive the fee entirely or set the minimum as low as $1,000, while jumbo and non-conforming loans often demand $25,000 or more. Some servicers also require you to be current on the loan and to have made at least 6 to 12 on-time payments since origination. Always confirm the minimum and the fee directly with your servicer in writing before sending the lump sum, since policies are not standardized across lenders.

Most lenders allow one to two recasts over the life of a loan, though a handful (Rocket Mortgage, some credit unions) let you recast unlimited times as long as you meet the minimum lump-sum threshold each time. The lender enforces this through its servicing system, not the original loan documents, so the policy is set by whoever owns the servicing rights at the time of the request, not the original underwriter. If you expect multiple windfalls (bonuses, RSU vests, inheritance), confirm the cap up front, because hitting the limit forces you back to either continued monthly prepayments or a full refinance.

Conventional conforming mortgages backed by Fannie Mae or Freddie Mac are recast-eligible at almost every major servicer. Government-backed loans usually are not: VA, FHA, and USDA loans are generally not eligible for recasting under their agency guidelines, since the agencies do not have a defined recast program. Jumbo and non-conforming loans depend entirely on the portfolio lender's policy, and most major jumbo lenders do allow recasts but with higher minimums (often $25,000 or $50,000). If you have a VA or FHA loan and want a lower payment, the standard path is a streamline refinance (IRRRL for VA, FHA Streamline) rather than a recast, which lowers your rate as well as your payment.