Lower your payment without refinancing — see the real numbers
A recast keeps your rate and your payoff date exactly where they are. You put a lump sum toward principal, the servicer re-amortizes the smaller balance over your remaining term, and your monthly payment drops. No new loan, no closing costs, no credit pull. Here’s what it would do for you — and how it compares to just paying the money down and finishing early.
Most people don’t know recasting exists, and the ones who do usually don’t realize the tradeoff: a recast lowers your payment but you still pay to your original payoff date, so you actually pay a little more total interest than if you’d made the same lump-sum payment and kept your current payment. Neither choice is wrong — one buys you monthly breathing room, the other buys you an earlier payoff. This shows you both side by side with your own numbers, no sales angle. Recasting is only available on conventional loans (not FHA, VA, or USDA), and not every servicer offers it — so check before you count on it.
— Matt Mergo · NMLS #563819Taxes and insurance (escrow) don’t change with a recast — only principal and interest. Your total monthly payment drops by the P&I amount shown above.
Same lump sum to principal — but instead of re-amortizing, you keep sending your current payment. Nothing drops month to month, but the loan finishes early and you pay less total interest.
Recasting is conventional-only — and conventional is exactly where PMI can be cancelled (FHA’s version usually can’t). If your lump sum drops your loan-to-value far enough, dropping PMI is a second monthly saving on top of the lower payment.
What a recast actually does
You make a one-time lump-sum payment toward your principal, and your servicer re-amortizes the loan — recalculating your monthly payment on the smaller balance while keeping the same interest rate and the same number of months remaining. Because you owe less but have the same time to pay it off, the monthly payment goes down. Unlike a refinance, there’s no new loan, no appraisal, no closing costs, and no credit check — usually just a small processing fee.
The catch nobody mentions
A recast lowers your payment but does not move your payoff date. If you instead made the exact same lump-sum payment and kept paying your current amount, the extra above the new (lower) payment would go straight to principal every month, so you’d finish the loan early and pay less total interest. Recasting trades some of that interest savings — plus a fee — for lower required payments now. That’s the comparison this tool runs for you.
When a recast makes sense
It shines when you’ve come into a lump sum (a home sale, a bonus, an inheritance) and want to lower a payment you’re locked into at a good rate — refinancing would mean giving up that rate. It’s also common right after buying before selling an old home. If your goal is simply to be debt-free sooner, keeping your payment and prepaying usually wins. If cash flow matters more than payoff speed, the recast wins.
For the full playbook — the order-of-operations catch (request the recast before you send the money), how big a lump sum is worth it, and exactly who qualifies — see the complete mortgage recast guide.
Educational estimate, not a quote, commitment to lend, or a recast offer. Payments shown are principal and interest only and exclude taxes, insurance, HOA, and any mortgage insurance. Results assume the servicer re-amortizes your current balance over your remaining term at your current rate; actual recast terms, minimum principal reduction, fees, and eligibility are set by your loan servicer and loan type. Recasting is generally not available on FHA, VA, or USDA loans. Confirm details with your servicer before making a payment. Forest Hills Mortgage · Matt Mergo, NMLS #563819. Equal Housing Opportunity.