Mortgage Recasting Calculator
After a lump-sum principal payment, see your lower monthly payment when the lender re-amortizes the balance over the same term — no refinance. Free.
Mortgage Recasting Calculator
Recasting (or re-amortization) lets you put a lump sum toward principal and have the lender recalculate a lower monthly payment over your existing term — keeping the same rate and payoff date, with no refinance and no new closing costs. Enter your loan to see the new payment.
How to Use the Mortgage Recasting Calculator
Enter your current loan
Use your present balance, interest rate, and the years remaining — recasting works on what you owe now, not the original loan amount.
Add the lump sum
The one-time amount you'll put toward principal — often a bonus, home-sale proceeds, or inheritance. Fannie Mae's Servicing Guide (C-1.2-01) allows re-amortization after a "substantial" principal curtailment but sets no dollar figure; each servicer sets its own minimum, so ask yours.
Note the recast fee
Servicers typically charge a flat administrative fee for the re-amortization agreement — a fraction of refinance closing costs, which Freddie Mac puts at 2–5% of the loan amount. Enter your servicer's quoted fee to factor it in.
Compare the two columns
Your rate and payoff date stay the same; only the monthly payment drops. The savings cards show how much lower your payment becomes and the total interest you avoid.
Recasting vs Refinancing vs Just Paying Extra
What Recasting Actually Does
A mortgage recast is one of the least-known but most useful options a homeowner has. You make a large one-time principal payment, and the lender re-amortizes the now-smaller balance over your remaining term, producing a lower required monthly payment. Crucially, your interest rate and your payoff date do not change — only the payment falls. Because the lender is simply recalculating an existing loan rather than underwriting a new one, there's no credit check, no appraisal, and no thousands of dollars in closing costs; most servicers charge a flat administrative fee. This makes recasting the ideal tool when you've come into a windfall, sold a previous home, and want lower monthly cash flow without touching a low interest rate you'd hate to give up by refinancing.
The distinction from the two adjacent options is what matters. Refinancing replaces your loan entirely — useful when rates have dropped enough to lower your rate, but costly and rate-resetting. Simply making extra principal payments shortens your loan and saves interest but keeps your required payment the same. Recasting sits in between: it lowers your payment (like a refinance) while keeping your rate and term (like extra payments). If you have a 3% pandemic-era mortgage and a chunk of cash, recasting lets you reduce your monthly obligation without surrendering that rate — something refinancing into today's higher rates could never do.
"Recasting is the move for anyone sitting on a low fixed rate with cash to deploy: lower your payment for a few hundred dollars in fees, and never give up the rate a refinance would force you to replace."
When Recasting Makes Sense — and Its Limits
Recasting shines when your priority is lower monthly cash flow rather than the fastest possible payoff. If your goal is to be debt-free sooner, keeping your old (higher) payment after a lump sum — i.e. just paying extra — saves more total interest, because you're throwing more money at principal each month. Recasting deliberately lowers that monthly contribution, so the lifetime interest saved is smaller than if you'd kept paying the old amount. There are practical limits too: not all loans are eligible. Conventional loans serviced for Fannie Mae or Freddie Mac can be re-amortized under their servicing guides; government-backed FHA, VA and USDA programmes do not offer an equivalent in practice, and jumbo or portfolio loans vary by lender, so confirm eligibility with your servicer before counting on it. For homeowners in Singapore and Malaysia, formal "recasting" is less standardised, but the equivalent often exists: many home loans allow partial prepayments that reduce either the tenure or the instalment, and flexi-loans let you park cash against the balance to cut interest while preserving access to the funds. Ask your bank whether a partial prepayment can be applied to lower the monthly instalment rather than the tenure — that's the local version of a recast.
Same rate, same payoff date, smaller payment, for a few hundred dollars
A recast re-amortizes your balance after a lump sum for a lower monthly payment.
Your interest rate and payoff date stay the same — only the payment drops.
No credit check, no appraisal, no refinance closing costs — just a small flat fee.
Fannie Mae documents a recast on Form 181 (Agreement for Modification, Re-Amortization, or Extension of a Mortgage) — and does not treat it as a loan modification.
Fannie Mae's Servicing Guide requires a "substantial" principal curtailment before re-amortizing, but sets no dollar minimum — servicers set their own.
Recasting is ideal when you want lower payments but keep a low rate.
FHA, VA and USDA loans have no recast equivalent in practice — confirm with your servicer.
To save the most interest, pay the lump sum but keep the old payment (don't recast).
Recasting is the opposite trade-off to a refinance — same rate, lower payment.
In SG/MY, the equivalent is a partial prepayment applied to lower the instalment.
Frequently Asked Questions
- A recast is when you make a large one-time principal payment and your lender re-amortizes the reduced balance over your remaining term, lowering your monthly payment. Your interest rate and payoff date stay the same. It requires no refinance, no credit check, and no appraisal — just a small flat fee — making it a low-cost way to reduce monthly cash flow without giving up your existing rate.
- Refinancing replaces your loan with a new one at a new rate and term, with full underwriting and thousands in closing costs. Recasting keeps your existing loan, rate, and payoff date — it just recalculates a lower payment after a lump-sum principal payment, for a small fee. If today's rates are higher than yours, refinancing would raise your rate; recasting lets you lower your payment while keeping the rate you have.
- It depends on your goal. If you want lower monthly payments, recast. If you want to be debt-free fastest and save the most total interest, make the lump-sum payment but keep your old, higher payment — that throws more at principal each month. Recasting deliberately lowers your monthly contribution, so it saves less lifetime interest than keeping the old payment, in exchange for better monthly cash flow.
- Most servicers charge a flat administrative fee for the re-amortization agreement, versus the 2–5% of the loan amount that Freddie Mac cites as typical refinance closing costs (lender fees, appraisal, title). There's no new interest rate, no credit pull, and no appraisal. Enter your servicer's quoted fee in the calculator to see the net benefit — the verdict line shows how many months of payment savings it takes to recover it.
- Usually yes. Fannie Mae's Servicing Guide (C-1.2-01) speaks of a "substantial" principal curtailment and leaves the threshold to the servicer, so minimums vary — some quote a dollar figure, some a percentage of the balance. Ask your servicer for their specific minimum and whether they recast at all. Some lenders recast automatically after a large principal payment; others require you to request it explicitly.
- No. Conventional loans serviced for Fannie Mae or Freddie Mac are generally eligible — Fannie Mae's Servicing Guide (C-1.2-01) sets out the re-amortization procedure — while government-backed FHA, VA and USDA programmes offer no equivalent in practice. Jumbo and portfolio loans vary by lender. Always confirm eligibility with your servicer before planning around a recast — if your loan isn't eligible, your alternatives are making extra payments (to shorten the term) or refinancing (to change the rate or payment).
- No. Recasting involves no credit inquiry and no new loan, so it has no negative effect on your credit. If anything, lowering your balance reduces your mortgage exposure. This is one of recasting's quiet advantages over refinancing, which involves a hard credit pull and opens a new account that temporarily lowers your average account age.
- When you have a lump sum, want lower monthly payments, and hold a rate you don't want to lose. The classic case: you bought a new home before selling your old one, then the old home sells and you have a large sum to apply. Recasting turns that into a permanently lower payment without refinancing into a higher current rate. It's also useful for anyone prioritising cash-flow flexibility over the fastest payoff.
- No. Recasting keeps the same remaining term, so you finish on the original schedule — you just pay less each month along the way. If you wanted the lump sum to also shorten the loan, you'd skip the recast and keep paying your old amount, which would pay the loan off early. Recasting is specifically the lower-payment, same-date option.
- Formal "recasting" is less standardised, but the equivalent usually exists. Many home loans in both countries allow partial prepayments that can reduce either the loan tenure or the monthly instalment — ask your bank to apply a prepayment to lower the instalment, which mirrors a recast. Malaysian flexi-loans go further, letting you park surplus cash against the balance to cut daily interest while keeping access to the funds. Check your facility's prepayment terms.
Method & sources
How it computes
Re-amortises the reduced balance (current balance − lump sum) over the same remaining term at the same rate: M = P·r/(1−(1+r)^−n), r = APR/12, n = months remaining. Interest remaining = M·n − balance; the optional recast fee is divided by the monthly saving to give a payback in months.
What this tool implements
- Level-payment (annuity-immediate) amortisation compounded monthly; rate and payoff date held fixed, only the payment changes
- Recast as described in Fannie Mae Servicing Guide C-1.2-01: re-amortisation of the unpaid balance after a substantial principal curtailment, documented on Form 181, not treated as a modification
- Fee and minimum-curtailment thresholds are servicer policy — no dollar figures are asserted
Sources
- servicing-guide.fanniemae.com — processing additional principal payments
- singlefamily.fanniemae.com — recast mortgage.htm
- Kellison SG. The Theory of Interest. 3rd ed. New York: McGraw-Hill; 2009. Chapter 3 (amortization schedules).
What can make this go out of date
- none at runtime — Fannie Mae/Freddie Mac servicing-guide recast provisions change rarely (C-1.2-01 last revised 13 Nov 2024)
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