Mortgage Recast Calculator

If you have come into a lump sum of money — through an inheritance, a bonus, a property sale, or accumulated savings — and you want to reduce your monthly mortgage payment without going through the cost and complexity of refinancing, a mortgage recast may be exactly the option you are looking for. The Mortgage Recast Calculator helps you see precisely what that decision looks like in financial terms before you commit to it.

Enter your original loan amount, current principal balance, interest rate, original loan term, time remaining, and the lump sum you plan to put toward the recast, and the calculator immediately shows you your new monthly payment, the total interest you will save over the life of the loan, and a complete before-and-after amortization schedule. Everything is presented clearly so you can make an informed decision and, if needed, export the results for a conversation with your lender.

What Is a Mortgage Recast?

A mortgage recast — also called loan re-amortization — is a process in which you make a large one-time payment directly toward your mortgage principal, and your lender then recalculates your monthly payment based on the reduced balance, keeping the original interest rate and remaining loan term exactly as they are. The result is a lower monthly payment for the rest of the loan’s life, with no change to your interest rate and no new loan originated.

This is fundamentally different from refinancing. When you refinance, you take out an entirely new loan, which typically involves credit checks, appraisals, closing costs, and a new interest rate — which may or may not be better than your existing one. A recast simply adjusts your payment schedule around a reduced principal. The process is usually straightforward, involves a modest administrative fee charged by the lender, and preserves the interest rate and term you already have.

Not all mortgages are eligible for recasting — government-backed loans such as FHA and VA loans generally do not qualify, while most conventional loans do. Your lender will confirm eligibility and any minimum lump sum requirements.

Who Should Use the Mortgage Recast Calculator

Homeowners Who Have Received a Windfall

An inheritance, a work bonus, proceeds from selling an investment, or any other unexpected influx of cash represents an opportunity to meaningfully reduce your housing costs for the remainder of your loan. This calculator shows exactly how much your monthly payment would fall and how much total interest you would avoid paying.

Buyers Who Used a Bridge Loan or Sold a Previous Home

Many homeowners who purchased a new property before selling their previous one find themselves with a significant lump sum once the sale completes. Recasting allows them to immediately apply those proceeds to reduce their ongoing monthly obligation without refinancing into a potentially less favourable rate environment.

Homeowners Seeking Lower Monthly Outgoings Without Refinancing

If interest rates have risen since you took out your mortgage, refinancing to reduce your payment would mean accepting a higher rate — which often increases total cost even if the monthly figure drops. A recast lets you lower your payment while keeping your existing, potentially much lower, interest rate intact.

Those Planning for Retirement or a Career Change

Reducing a fixed monthly housing expense ahead of a transition to lower income — whether through retirement, a career shift, or reducing work hours — can significantly improve cash flow and financial resilience during that period.

How to Use the Mortgage Recast Calculator

The calculator is straightforward and produces your results in seconds.

Step 1: Enter Your Original Loan Amount

Input the total amount you originally borrowed when the mortgage was first taken out. This figure is used to establish your original payment schedule for comparison purposes.

Step 2: Enter Your Current Principal Balance

Input the amount you currently owe on the mortgage — your outstanding principal as of today. This is the balance that your lump sum payment will reduce before re-amortization.

Step 3: Enter Your Interest Rate

Input your current mortgage interest rate as a percentage. Because a recast does not change your rate, this figure remains constant throughout both the before and after calculations.

Step 4: Enter Your Original Loan Term

Select the original term of your mortgage in years — typically 10, 15, 20, or 30 years. This is used alongside the time remaining to accurately reconstruct your payment history and current position.

Step 5: Enter the Time Remaining on Your Loan

Input how many years are left on your mortgage. This is the period over which your reduced balance will be re-amortized following the recast.

Step 6: Enter Your Lump Sum Payment

Input the amount you intend to pay toward your principal as part of the recast. This is deducted from your current principal balance, and the resulting lower balance is used to calculate your new monthly payment.

Step 7: Click Calculate Recast

Click the button and your complete results appear immediately. You will see your monthly payment before and after the recast, the monthly saving, the total interest paid before and after, and the total interest saving over the life of the loan.

Understanding Your Results

Monthly Payment Savings

This figure shows how much your required monthly payment falls as a result of the recast. Even a modest lump sum applied to a large mortgage balance can produce a meaningful and permanent reduction in your monthly housing cost.

Total Interest Savings

Because your principal balance is permanently reduced, every future payment carries less interest. The cumulative effect over the remaining loan term is often substantial — frequently exceeding the lump sum payment itself in total interest avoided.

Loan Summary

The summary tab presents a clear side-by-side comparison of your key loan figures before and after the recast — original loan amount, current principal, principal after recast, interest rate, remaining term, lump sum applied, original monthly payment, new monthly payment, monthly saving, total payments before and after, and total savings.

Amortization Schedule

The amortization tab provides a full payment-by-payment breakdown showing both the original payment schedule and the recasted schedule side by side — including principal paid, interest paid, and remaining balance for each period. You can toggle between monthly and yearly views depending on how much detail you need.

Recast vs. Refinance — Understanding the Difference

The choice between recasting and refinancing depends on your specific circumstances, and understanding the distinction is essential to making the right decision.

Refinancing replaces your existing mortgage with an entirely new loan, typically at a new interest rate. It involves closing costs — often 2% to 5% of the loan amount — and requires a full credit and income evaluation. If market rates are lower than your current rate, refinancing can reduce both your monthly payment and your total interest cost. If rates are higher, refinancing to lower your payment would come at the cost of paying significantly more interest over time.

Recasting keeps your existing loan, interest rate, and remaining term entirely intact. It simply reduces the balance and recalculates your payment accordingly. The administrative fee is usually a few hundred dollars at most. There is no credit check, no appraisal, and no new loan documentation. For homeowners who secured a favourable rate and simply want a lower monthly payment, recasting is almost always the more cost-effective path.

Key Considerations Before Recasting

Lender Requirements

Most lenders require a minimum lump sum — commonly $5,000 to $10,000 or more — before they will process a recast. Confirm the specific requirements with your lender before planning around a recast.

Opportunity Cost

Applying a large lump sum to your mortgage principal reduces the liquidity of that capital. Before committing to a recast, consider whether the same funds might generate stronger returns if invested elsewhere, and weigh that against the certainty and immediacy of a reduced monthly payment.

Loan Eligibility

As noted, government-backed mortgages — FHA, VA, and USDA loans — are generally not eligible for recasting. Jumbo loans and some other specialist products may also have restrictions. Always confirm eligibility directly with your lender.

Timing

Most lenders require that a certain number of payments have been made before a recast is permitted — often at least two or three months of payments following the most recent recast or loan origination. Check your lender’s specific policy.

Why the Mortgage Recast Calculator Stands Out

Most basic mortgage tools calculate original payments or refinance scenarios. This calculator is built specifically for the recast decision — the precise moment when a homeowner with available capital wants to know exactly how much relief a lump sum payment can deliver without altering their loan’s rate or term. With a full before-and-after comparison, a detailed amortization schedule viewable by month or year, and results that are instantly exportable for lender discussions, it provides everything needed to evaluate a mortgage recast with complete clarity. It is free, works on any device, and requires only your existing loan details and planned lump sum to deliver a comprehensive, accurate picture of the savings available to you.