Mortgage Recast vs Extra Payment Calculator

Use this Mortgage Recast vs Extra Payment Calculator to compare two ways to use a lump-sum principal payment on an existing mortgage. A recast applies the payment to principal and recalculates the required principal-and-interest payment over the same remaining term. An extra-payment approach applies the same lump sum but keeps the original payment, which can shorten the payoff period and reduce interest. Enter your current principal balance, interest rate, remaining term, lump sum, and any lender recast fee for a transparent estimate.

Mortgage Recast versus Extra Payment

With a mortgage recast, the lender re-amortizes the lower balance over the remaining loan term. The interest rate and maturity date generally remain unchanged, while the required principal-and-interest payment becomes lower. This can help household cash flow. An extra payment without a recast also reduces the balance, but you continue making the original payment. Because the payment is larger relative to the reduced balance, more of each future payment goes to principal and the loan can end earlier.

How a Mortgage Recast Calculator Works

The recast scenario begins with your balance after the lump-sum payment. It then calculates a new payment using the same annual interest rate and remaining number of monthly payments. The calculation only models principal and interest. Escrow, property taxes, homeowners insurance, mortgage insurance, lender fees, and payment changes are not included unless you add a recast fee as an estimate.

How Extra Principal Payments Save Interest

When you make a lump-sum payment and keep your original principal-and-interest payment, the balance falls faster. The calculator estimates the number of payments remaining, projected interest, and months saved compared with making no lump-sum payment. This makes the tradeoff simple: a recast prioritizes a lower required payment, while keeping the original payment usually prioritizes earlier payoff and greater interest reduction.

When a Mortgage Recast May Make Sense

A recast can be helpful when you have made a large principal payment and want a lower minimum monthly obligation without refinancing. It may be relevant after a home sale, bonus, inheritance, or other cash event. However, not all loans are eligible, a lender may require a minimum principal payment, and a fee may apply. The lender's recast policy controls the outcome. A lower required payment can also provide flexibility if you choose to pay extra later.

When Keeping the Payment May Make Sense

Keeping the original payment can be useful when your cash flow is comfortable and your goal is to retire the mortgage sooner. The interest estimate helps quantify the potential benefit, but it should not be the only decision factor. Consider emergency savings, higher-interest debt, retirement contributions, taxes, investment risk, and whether your loan has a prepayment penalty. A loan professional can explain lender-specific terms.

Recast versus Refinance

A recast is not a refinance. A refinance replaces the existing loan and can change the rate, term, closing costs, and loan program. A recast normally keeps the existing interest rate and remaining maturity date but changes the payment after the principal reduction. Use this tool for recast and extra-payment planning only; it does not compare refinance offers.

Confirm Your Lender's Terms

This tool provides an educational estimate, not a payoff quote, loan offer, or financial recommendation. Confirm eligibility, required payment amount, recast fee, payment timing, escrow treatment, and any prepayment restrictions directly with your lender or servicer before sending a large payment.