What a mortgage recast is
When you recast a mortgage, you pay a lump sum toward principal and your lender recalculates your monthly payment based on the lower balance. Your rate and payoff date stay the same, so the payment drops. Unlike refinancing, there’s no new loan, no credit check and only a small fee.
An example
On a $350,000 balance at 6.5% with 27 years left, a $50,000 lump sum and recast lowers the payment by about $328 a month.
Recast or just pay extra?
If you make the same lump-sum payment without recasting, your payment stays the same and the loan ends years sooner, saving more interest overall. Recasting gives you a lower required payment and more monthly breathing room instead. The calculator shows both side by side.
Who can recast
- Most conventional loans allow it, often with a minimum lump sum of $5,000 to $10,000 and a fee of a few hundred dollars.
- FHA, VA and USDA loans generally can’t be recast.
- A common use is buying a new home before selling the old one, then recasting with the sale proceeds.
How to request a recast
Call your servicer and ask whether your loan can be recast, what the minimum lump sum and fee are, and how long it takes. You’ll usually send the lump sum first and then sign a short recast agreement; your new payment typically starts within one or two billing cycles. Keep making your current payment until the servicer confirms the new amount.
Questions buyers ask
How long does a recast take?
Usually a few weeks after the servicer receives your lump sum and signed request; the new payment typically starts within one or two billing cycles.
Is a recast better than refinancing?
A recast keeps your current rate and costs only a small fee, so it’s usually better if your rate is already good. Refinancing makes sense if you can get a meaningfully lower rate or want to change the loan type or term.
How much does a recast cost?
Typically a few hundred dollars, set by your servicer.
Does recasting change my interest rate?
No. Only the payment changes; the rate and payoff date stay the same.
Can I recast an FHA or VA loan?
Generally no. Those loans would need to be refinanced to lower the payment.