Mortgage Recasting Explained: Lower Your Monthly Payment Without Refinancing

What Is Mortgage Recasting?

Mortgage recasting (also called re-amortization) is when you make a large lump-sum payment toward your mortgage principal, then ask your lender to recalculate your monthly payment based on the new, lower balance. Your interest rate and loan term stay the same — only your monthly payment decreases.

How It Works

1. You make a significant lump-sum payment toward your principal (most lenders require at least $5,000–$10,000).
2. You request a recast from your lender (usually a small fee of $150–$300).
3. Your lender recalculates your monthly payment based on the reduced balance.
4. You continue making lower monthly payments for the remaining loan term.

Recasting vs. Refinancing

• Cost: Recasting costs $150–$300. Refinancing costs $2,000–$6,000+ in closing costs.
• Interest rate: Recasting keeps your current rate. Refinancing gets a new rate (could be higher or lower).
• Credit check: Recasting requires none. Refinancing requires a full credit check and appraisal.
• Timeline: Recasting takes days. Refinancing takes 30–60 days.
• Loan term: Recasting keeps your remaining term. Refinancing starts a new term.

When Recasting Makes Sense

• You received a large windfall (inheritance, bonus, home sale proceeds)
• You want lower monthly payments without the cost and hassle of refinancing
• Your current interest rate is already competitive
• You want to reduce monthly cash flow obligations while keeping the same payoff date

Important Limitations

• Not all loan types qualify — FHA and VA loans typically cannot be recast
• You must have a conventional loan in good standing
• The lump sum does not reduce total interest as much as ongoing extra payments would

Run Your Numbers

Use our mortgage payoff calculator to compare the impact of a lump-sum payment with and without recasting, and see how it stacks up against other prepayment strategies.