What a Mortgage Recast Is
A mortgage recast lets you make a large lump-sum principal payment, after which the lender re-amortizes the loan over the remaining term — lowering your monthly payment while keeping your existing rate and avoiding refinance costs.
Who It's For
- Homeowners who received a windfall or sold another property
- Borrowers happy with their rate who want a lower payment
- Those wanting to avoid refinance closing costs
- Owners reducing their payment without restarting the term
How It Works
You pay a lump sum toward principal, then the lender recalculates your monthly payment based on the lower balance over the remaining term. Your rate and term stay the same — you simply pay less monthly. Not all loans are eligible, and a modest recast fee usually applies.
Frequently Asked Questions
How is a recast different from a refinance?
A recast keeps your existing loan, rate, and term — only the payment drops after a lump-sum principal payment. A refinance replaces the loan entirely. Recasting avoids closing costs.
Is every loan eligible to recast?
No — eligibility depends on your loan type and servicer. Government loans often aren't eligible. We can help you check.
How much do I need to pay to recast?
Lenders usually require a minimum lump sum (often several thousand dollars). A modest recast fee typically applies.