Updated Mortgage & Loan Tool

Mortgage Recast Calculator

Estimate your new monthly mortgage payment after a lump-sum principal payment. See how recasting affects your payment and remaining interest over the life of the loan.

New Monthly Payment Lump-Sum Principal Interest Savings Estimate Fixed-Rate Mortgages

Recalculate Your Mortgage Payment After a Lump-Sum Recast

Enter your current mortgage balance, interest rate, remaining term and a lump-sum principal payment to estimate your new monthly payment after recasting the loan. You can also enter your current payment if you already know it, or let the calculator derive it from balance, rate and remaining term.

This calculator assumes a fixed-rate mortgage with equal monthly payments and a recast that keeps your interest rate and remaining term the same while lowering the monthly payment.

Mortgage Recast Calculator – How a Lump-Sum Payment Changes Your Monthly Payment

The Mortgage Recast Calculator on MyTimeCalculator helps you see what happens when you make a large lump-sum payment toward your mortgage principal and your lender agrees to recast the loan. A recast keeps your interest rate and remaining term the same, but it recalculates your monthly payment based on a lower outstanding balance.

This tool estimates your current payment and remaining interest, then computes the new payment and interest after recasting so you can compare cash flow and long-term savings side by side.

Core Mortgage Payment Formula

For a standard fixed-rate mortgage with equal monthly payments, the monthly payment \( M \) is determined by the principal \( P \), monthly interest rate \( r \) and total number of remaining monthly payments \( n \).

The monthly interest rate is the annual rate divided by 12:

\( r = \dfrac{i_{\text{annual}}}{12} \)

The total number of payments is the remaining term in years multiplied by 12:

\( n = \text{years}_{\text{remaining}} \times 12 \)

The standard amortization payment formula is:

\( M = P \times \dfrac{r(1 + r)^{n}}{(1 + r)^{n} - 1} \)

This formula ensures that if you make the same payment \( M \) for \( n \) months, the loan balance will be fully paid off at the end of the term.

How Mortgage Recasting Changes the Payment

In a recast, you make a lump-sum payment \( L \) that goes directly toward principal. The new principal becomes:

\( P' = P - L \)

Your interest rate and remaining number of payments \( n \) typically stay the same, but the payment is recalculated on the lower balance \( P' \). The new monthly payment \( M' \) is:

\( M' = P' \times \dfrac{r(1 + r)^{n}}{(1 + r)^{n} - 1} \)

Because \( P' < P \), the new payment \( M' \) will generally be lower than the original payment \( M \). The difference between the two is your monthly payment reduction:

\( \Delta M = M - M' \)

Remaining Interest Before And After Recast

The calculator estimates how much interest you still have left to pay under the current schedule and how much interest you would pay after recasting.

Before the recast, if you have payment \( M \), remaining term \( n \) and current balance \( P \), the total remaining payments are approximately:

\( \text{Total Payments}_{\text{before}} \approx M \times n \)

The remaining interest is then:

\( I_{\text{before}} \approx M \times n - P \)

After the recast, you pay the lump sum \( L \) immediately, then make new payment \( M' \) for the same remaining term \( n \). Total future payments become:

\( \text{Total Payments}_{\text{after}} \approx L + M' \times n \)

The remaining interest after recast is:

\( I_{\text{after}} \approx L + M' \times n - P \)

The estimated interest savings from recasting are:

\( \text{Interest Savings} \approx I_{\text{before}} - I_{\text{after}} \)

The calculator applies these relationships numerically using your inputs to show both the payment change and the impact on remaining interest.

Example: Mortgage Recast With Lump-Sum Payment

Suppose you have a remaining balance of \( P = 280{,}000 \), an annual interest rate of \( 4.25\% \) and 25 years left on a 30-year mortgage. You are considering a lump-sum recast payment of \( L = 30{,}000 \).

  1. Convert the annual rate to a monthly rate:
    \( r = \dfrac{0.0425}{12} \approx 0.0035417 \)
  2. Calculate the number of remaining payments:
    \( n = 25 \times 12 = 300 \)
  3. Compute the current monthly payment:
    \( M = 280{,}000 \times \dfrac{r(1 + r)^{300}}{(1 + r)^{300} - 1} \)

    Plugging in the numbers gives a payment of roughly a few hundred dollars per month (the exact value is computed by the calculator).

  4. Find the new principal after recast:
    \( P' = 280{,}000 - 30{,}000 = 250{,}000 \)
  5. Compute the new payment \( M' \) with \( P' = 250{,}000 \) while keeping \( r \) and \( n \) the same.
    \( M' = 250{,}000 \times \dfrac{r(1 + r)^{300}}{(1 + r)^{300} - 1} \)

The difference \( M - M' \) is your reduced monthly payment. The calculator then combines these with the remaining term to estimate remaining interest before and after recast and the interest you could save over time.

Recast vs Extra Principal Without Recast

A lump-sum principal payment helps you whether or not your loan is formally recast. The difference lies in how the savings show up:

  • With a recast, your monthly payment drops and your payoff date usually stays the same.
  • Without a recast, your payment stays the same but more goes to principal each month, so you may pay the loan off earlier.

The underlying amortization math is similar in both cases, but a recast focuses on lowering the payment, while pure extra principal focuses on shortening the term. Many homeowners choose recasting when they want permanent monthly payment relief without changing their interest rate.

How To Use The Mortgage Recast Calculator

  • Enter your current mortgage balance, annual interest rate and remaining term in years.
  • Optionally, type your current monthly payment if you know it. If you leave it blank, the calculator will estimate it using the standard amortization formula.
  • Enter the lump-sum amount you plan to pay toward principal as part of the recast.
  • Choose the number of decimal places you want in the output.
  • Click the calculate button to see your current payment, new payment after recast, payment change, remaining interest before and after, and estimated interest savings.

Assumptions And Limitations

This Mortgage Recast Calculator is designed for quick scenario planning and makes a few simplifying assumptions:

  • The loan is a fixed-rate, fully amortizing mortgage with equal monthly payments.
  • The recast uses the same interest rate and remaining term as your current loan.
  • The lump-sum payment is made at the recast date, and interest is calculated with a standard monthly compounding approach.
  • Rounding differences, lender fees and daily interest conventions are not included.

Because of these assumptions, the calculator provides an estimate rather than an exact quote. Use it to understand the size and direction of changes, then ask your lender for precise numbers based on their policies and schedules.

Mortgage Recast Calculator FAQs

Frequently Asked Questions About Mortgage Recasting

Get quick answers about how recasting works, when it makes sense and how to interpret this calculator's results.

Recasting typically does not require a new credit check or create a new loan, so it usually has little or no direct impact on your credit score. However, consistent on-time payments and a lower outstanding balance are generally positive factors over time.

Many lenders charge a small flat fee to process a recast, often much lower than closing costs on a refinance. The exact fee and minimum lump-sum amount vary by lender, so you should confirm the details before requesting a recast.

Some loan types and investors place restrictions on recasting. Conventional loans held by certain lenders may allow it, while others may not. Government-backed loans and jumbo loans may have different rules. Always check your note and ask your servicer whether your specific loan is eligible.

Some lenders allow multiple recasts, while others limit how many times you can recast or require a minimum number of months between requests. If you expect several future lump-sum payments, ask your lender how many recasts they permit and what the conditions are.

If today\u2019s interest rates are much lower than your current rate, refinancing may produce larger savings than recasting because it reduces the rate as well as potentially adjusting the term. Recasting is more attractive when your current rate is already competitive and you mainly want to lower your payment using a lump-sum principal reduction.

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