A mortgage recast is when you make a big lump sum payment directly toward your loan’s principal, and then your lender recalculates your monthly payments based on the lower balance.

Your loan term and interest rate stay the same, but your monthly payment goes down.

I'm going to go through several questions about it, and hopefully it answers one you've been thinking about. If not, Comment or DM me.

How much will it lower my payment by?

Depends on several factors. Here's a calculator to figure it out.

Recast

How is a recast different from refinancing?

Refinancing replaces your old loan with a brand new one, often with a new interest rate and loan term.

Recasting just reworks your existing loan’s monthly payment after a lump sum payment.

No credit check or closing costs required. (Though they may charge a recast fee)

Does recasting reset it back to 30 years?

No. Your term stays the same. I'm going to repeat myself a lot on these questions. But Here's what stays the same:

Remaining term

Interest rate

Does recasting change my interest rate?

Nope. The interest rate stays exactly the same. You’re just paying less interest over time because the balance is smaller.

Is recasting available on all types of loans?

Mostly conventional loans. FHA, VA, and USDA loans generally don’t allow recasting. Also, not all lenders offer it, even for conventional loans.

Can I recast any time I want?

Not always. Some lenders have rules, like a waiting period, a minimum number of payments made, or only allowing one recast over the life of the loan.

How much do I have to pay toward the principal to qualify for a recast?

It depends on the lender, but most require a minimum lump sum, often $5,000 or more. Some may require $10,000+.

Is there a fee to recast a mortgage?

Usually yes, but it’s small, typically $150 to $500. Far cheaper than refinancing.

Do I have to go through a credit check or underwriting again?

No. That’s one of the perks. Since it’s not a new loan, there’s no requalification process.

Can I recast more than once?

Sometimes. Some lenders allow multiple recasts, others don’t. You’ll need to check with your loan servicer.

Is it better to recast or refinance?

Depends on your goal. If you want a lower rate or shorter term, refinance (depending on where rates are at).

If you want to apply extra toward principal and lower your monthly payment while keeping everything else the same, then recast.

What’s the advantage of recasting instead of just paying extra toward principal?

Extra payments reduce interest and pay the loan off faster, but your monthly payment doesn’t change.

A recast actually lowers your required monthly payment, which gives you flexibility.

Can I reduce my loan term by recasting?

No, the remaining term stays the same.

You can pay it off faster by keeping your payment the same voluntarily, but a recast won’t shorten the term by default.

Anything extra beyond the minimum, applied toward principal will help pay it off faster.

Is there a downside to recasting?

Not really, unless you’d be better off using that lump sum for something else (like investing or paying off higher-interest debt).

Also, your servicer has to agree to it.

Do all lenders offer recasting?

No.

Some don’t allow it at all. Even among lenders that do, some loan types or investor restrictions (like loans owned by Fannie Mae vs. a portfolio lender) can limit eligibility.

Why would a lender not allow a recast?

Investor rules, servicing policies, or the loan type might prohibit it.

How do I ask my servicer if recasting is available?

Call the number on your mortgage statement and ask: “Do you offer mortgage recasting, and what are the requirements?”

They'll usually have a dedicated department or process.

Can I recast after selling a different property and using that cash?

Yes, the lump sum can come from anywhere.

As long as you’re paying down your loan principal, the source doesn’t matter.

What if I get a big bonus or inheritance, is that a good time to recast?

It would be an appropriate time to do it.

This will boil down to "what is the best utilization for this money?"

Does recasting affect my escrow or property taxes?

No. Escrow payments (for taxes and insurance) stay the same unless your taxes or insurance change. Only the principal and interest portion is recalculated.

Can recasting remove my mortgage insurance?

Not directly.

But if the lump sum brings your loan balance below 80% of the home’s original value, you can request PMI cancellation (assuming your loan qualifies).

The recast calculator

Here's that calculator again if you need it

Recast

Summary

A mortgage recast can be a low-cost way (besides the lump sum itself) to lower your monthly payment without refinancing, resetting your loan term, or going through a credit check.

If you’ve got a lump sum and want more breathing room in your budget, it’s worth calling your servicer to see if it’s an option.