Mortgage & Loans

Mortgage Recast Calculator

Calculate your new lower monthly mortgage payment and interest savings after making a lump-sum principal recast payment.

Formula Verified & Maintained by:David Miller, CPA

CPA, M.S. Finance (NYU Stern) • Lead Financial Analyst & Tax Technology Editor

Peer-Reviewed AlgorithmAudited for 2026 Rules

Interactive Calculator

1. Provide Details

Current Loan Principal Balance ($)

Mortgage Interest Rate (%)

Remaining Term (Years)

yrs

Lump-Sum Recast Payment ($)

2. Output Results

New Recast Monthly Payment$1688.02

Monthly Payment Savings$337.60

New Loan Principal Balance$250000.00

Original Monthly Payment$2025.62

How to Calculate: Formula & Steps

The lender re-amortizes the reduced loan balance over the remaining term length.

Formula Used:New Payment = Amortize(Remaining Principal - Lump Sum, Interest Rate, Remaining Months)

Step-by-Step Calculation Example

Lump sum of $50,000 on a $300,000 mortgage reduces monthly payment significantly while maintaining existing rate.

Common Mistakes to Avoid

Confusing recast with refinancing
Assuming all lenders offer zero-fee recasting

Practical Use Cases

Lump sum windfall application
Lowering monthly fixed expenses

Expert Tips

Check if your mortgage servicer charges a minor recast processing fee ($150-$300).

Disclaimer

This calculation tool is provided for educational and informational estimation purposes only. Results are based on mathematical formulas and user-supplied parameters. They do not constitute formal underwriting, financial, tax, engineering, or legal determinations.

Frequently Asked Questions About Mortgage Recast Calculator

How does an interest-only HELOC work during the draw period?

During the initial draw period (typically 10 years), your monthly HELOC payment covers only accrued interest on the drawn balance. Once the repayment period begins (usually 10-20 years), monthly payments rise as principal amortizes.

What is a mortgage recast vs refinancing?

A mortgage recast allows you to make a lump-sum principal payment while keeping your existing interest rate and loan term. The lender recalculates (re-amortizes) your monthly payment to lower it, whereas refinancing replaces your loan with a new rate and term.