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What will a mortgage recast save?

See how much a lump sum and a recast lower your mortgage payment, and whether keeping the old payment saves more.

Your numbers

New monthly payment
$1,688.02

Paying $50,000.00 on $300,000.00 and recasting lowers the payment from $2,025.62 to $1,688.02, saving $51,281.07 of interest.

Payment today
$2,025.62
Lower by
$337.60
Interest saved by recasting
$51,281.07
Months to earn back the fee
1
Interest saved keeping the old payment
$143,645.76
Months sooner keeping the old payment
95
Interest after the recast
$256,405.37
Balance after the lump sum
$250,000.00
Months
300

Answer for the example date Tuesday, September 29, 2026. It changes to today's date when the page loads.

New monthly payment: $1,688.02. Paying $50,000.00 on $300,000.00 and recasting lowers the payment from $2,025.62 to $1,688.02, saving $51,281.07 of interest.

How does the balance fall with and without the lump sum?

What does every payment look like after the recast?

The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use

How to calculate

Computes the new monthly payment after a lump-sum mortgage recast, the interest it saves, and how it compares with paying the lump sum and keeping the old payment.

Example with the default inputs (Mortgage balance today $300,000.00, Interest rate 6.5%, Months left to pay 300, Lump sum $50,000.00, Recast fee $250.00, First payment after the recast September 29, 2026) on the example date Tuesday, September 29, 2026: Paying $50,000.00 on $300,000.00 and recasting lowers the payment from $2,025.62 to $1,688.02, saving $51,281.07 of interest.

Method: new payment = (B − lump) × r ÷ (1 − (1 + r)^−n), with B the balance, r the rate ÷ 12, and n the months left; old payment is the same formula on B; each plan runs month by month (interest = balance × r).

  • The rate and the number of months left do not change with the recast.
  • Today’s payment is the one that repays today’s balance over the months left.
  • The lump sum is paid now, before the first new payment; the fee is paid in cash, not added to the loan.
  • Taxes, insurance, and mortgage insurance in the payment are not included.
  • Values are not rounded to the cent between months; only the display is rounded.

Machine-readable copies: Markdown, JSON.

Worked examples

Each example is checked against the calculator on every build.

  1. Mortgage balance today $300,000.00, Interest rate 6.5%, Months left to pay 300, Lump sum $50,000.00, Recast fee $250.00 gives Payment today $2,025.62, New monthly payment $1,688.02, Interest saved by recasting $51,281.07, Interest saved keeping the old payment $143,645.76, Months sooner keeping the old payment 95, Months to earn back the fee 1.Source: hand calculation in content.mdx; Python 3 in docs/progress/WP-31/python/recast.py
  2. Mortgage balance today $120,000.00, Interest rate 0%, Months left to pay 240, Lump sum $20,000.00 gives Payment today $500.00, New monthly payment $416.67, Months sooner keeping the old payment 40, Interest saved by recasting $0.00.Source: hand calculation in content.mdx: at 0%, 120,000 ÷ 240 and 100,000 ÷ 240; 100,000 ÷ 500 = 200 months
  3. Mortgage balance today $200,000.00, Interest rate 7%, Months left to pay 360, Lump sum $10,000.00, Recast fee $500.00, First payment after the recast 2026-11-01 gives Lower by $66.53, Months to earn back the fee 8, Interest saved by recasting $13,950.89, Months sooner keeping the old payment 52.Source: hand calculation in content.mdx; Python 3 in docs/progress/WP-31/python/recast.py

How it works

Write B for today's balance, L for the lump sum, r for the rate ÷ 12 (as a decimal), and n for the months left. The lump sum must be less than B.

  1. Payment today: P0 = B × r ÷ (1 − (1 + r)^−n), the payment that repays B over n months (at 0%, B ÷ n).
  2. New payment after the recast: P1 = (B − L) × r ÷ (1 − (1 + r)^−n). "Lower by" is P0 − P1.
  3. Three plans, each run month by month (interest = balance × r; the payment minus the interest lowers the balance; the payment that would take the balance below 0, or payment number n, pays exactly what is left):
    • No lump sum: balance B, payment P0, for n months.
    • Recast: balance B − L, payment P1, for n months.
    • Keep the old payment: balance B − L, payment P0, until the balance is 0.
  4. Interest saved by recasting is the no-lump-sum interest minus the recast interest. Interest saved keeping the old payment is the no-lump-sum interest minus that plan's interest.
  5. Months sooner keeping the old payment is n minus that plan's number of payments, which is −ln(1 − (B − L) × r ÷ P0) ÷ ln(1 + r) rounded up (at 0%, (B − L) ÷ P0).
  6. Months to earn back the fee is the fee ÷ (P0 − P1), rounded up, when both are above 0.

The first new payment is in the month you enter.

Assumptions

  • The rate and the end date do not change, and today's payment is the one that repays today's balance over the months left.
  • The lump sum is paid now, and the fee is paid in cash.
  • Taxes, insurance, and mortgage insurance paid with the mortgage are not included.
  • Values are not rounded to the cent between months; only the display is rounded.

Worked examples by hand

$300,000 at 6.5% with 300 months left and a $50,000 lump sum, $250 fee. r = 0.065 ÷ 12 = 0.0054167 and (1 + r)^−300 = 0.197777. The payment today is 300,000 × 0.0054167 ÷ (1 − 0.197777) = $2,025.62; after the recast it is 250,000 × 0.0054167 ÷ 0.802223 = $1,688.02, lower by $337.60, so the fee is earned back in 1 month. Running the three plans: no lump sum costs $307,686.45 of interest, the recast $256,405.37 (saving $51,281.07), and keeping the old payment $164,040.68 (saving $143,645.76 and ending 95 months sooner).

$120,000 at 0% with 240 months left and a $20,000 lump sum. The payment today is 120,000 ÷ 240 = $500; after the recast it is 100,000 ÷ 240 = $416.67. There is no interest to save ($0). Keeping $500 a month clears $100,000 in 200 months, 40 months sooner.

$200,000 at 7% with 360 months left, a $10,000 lump sum, and a $500 fee. r = 0.0058333 and (1 + r)^−360 = 0.123206. The payment today is $1,330.60 and after the recast 190,000 × 0.0058333 ÷ 0.876794 = $1,264.07, lower by $66.53. The fee takes 500 ÷ 66.53 = 7.5, so 8 months to earn back. The recast saves $13,950.89 of interest; keeping the old payment ends the loan 52 months sooner.

Other questions people ask

What is a mortgage recast?

You pay a lump sum toward the principal and the lender works out a new, lower payment on the smaller balance. The rate and the end date stay the same. Without a recast, a lump sum keeps your payment the same and ends the loan sooner.

How is the new payment calculated?

The lender re-amortizes the balance after the lump sum over the months left: payment = (B − lump) × r ÷ (1 − (1 + r)^−n), with r the rate ÷ 12 and n the months left. $300,000 at 6.5% with 300 months left is $2,025.62 a month; after a $50,000 lump sum it is $1,688.02.

Is recasting better than paying the lump sum and keeping my payment?

Keeping the old payment always saves more interest, because the extra money each month keeps paying down principal. In the example it saves $143,645.76 and ends the loan 95 months sooner, against $51,281.07 saved by recasting. Recasting is for when you want the lower monthly payment and the flexibility it gives.

What does a recast cost?

Lenders usually charge a fee of a few hundred dollars and may ask for a minimum lump sum. The page shows how many months of lower payments it takes to earn the fee back.

Can every mortgage be recast?

No. It is up to the lender, and government-backed loans such as FHA, VA, and USDA loans generally cannot be recast. Ask your servicer before you send a lump sum.

How is a recast different from a refinance?

A refinance replaces your loan with a new one, often at a new rate and term, with closing costs. A recast keeps your loan, rate, and end date and only lowers the payment to match the smaller balance.