Mortgage Recast Calculator

A mortgage recast is one of the most underused tools in personal finance. Most homeowners who come into a lump sum of money — from a bonus, inheritance, property sale, or savings buildup — instinctively think about refinancing. But recasting is often simpler, cheaper, and achieves the same core goal: a lower monthly payment. When you recast a mortgage, you make a one-time principal payment to your lender, who then re-amortizes the remaining loan balance over the original remaining term at the same interest rate. There is no application, no credit check, no appraisal, and no closing costs beyond a small administrative fee charged by most lenders. Your rate and loan term stay exactly the same — only your monthly payment drops, in proportion to how much principal you paid down.

The math behind a mortgage recast follows the standard loan amortization formula. Your new monthly payment after recasting is calculated as:

New Monthly Payment = P × [r(1 + r)^n] ÷ [(1 + r)^n − 1]

Where P is the new principal balance after the lump sum is applied (current balance minus the lump-sum payment), r is the monthly interest rate (annual rate ÷ 12), and n is the number of months remaining on the loan. Because the principal balance P is now smaller, the resulting monthly payment is proportionally reduced. The loan term itself does not change — you still finish paying on the same schedule — but each payment now covers a smaller principal balance, so less of every payment goes toward interest and more goes toward principal from day one.

To illustrate: suppose your current principal balance is $250,000 with 25 years remaining at 4.5% interest. Your current monthly payment on that balance is approximately $1,389. If you apply a $50,000 lump sum, your new principal becomes $200,000. Recasting at the same rate and remaining term brings your new monthly payment down to roughly $1,111 — a saving of about $278 per month. Across 25 years, that difference compounds into tens of thousands of dollars in total interest saved.

The Mortgage Recast Calculator works through all of this for your specific numbers. You enter your original loan amount, current principal balance, interest rate, original loan term, time remaining on the loan, and the lump sum you plan to apply. The calculator then outputs your original monthly payment and your new post-recast monthly payment side by side, the monthly savings in dollars and as a percentage reduction, total interest paid before and after the recast, the total savings over the remaining loan life, and a full amortization schedule that compares the original repayment structure against the recast structure month by month — or year by year if you prefer a summarized view.

To use it, fill in all six input fields and click Calculate Recast. The Summary tab gives you a clean overview of the loan details and payment comparison. The Amortization tab lets you trace exactly how principal, interest, and remaining balance evolve differently under both scenarios across every payment period.

Recasting makes the most sense when you have a lump sum available, your current interest rate is already competitive so refinancing holds little appeal, and your primary goal is reducing monthly cash flow obligations rather than shortening your loan term. It is particularly well suited to homeowners who have recently sold a previous property and are rolling equity into their current mortgage, those who received a large windfall and want to reduce financial pressure without committing to a shorter term, and anyone who wants the simplicity of a lower payment without navigating the full refinancing process. The calculator lets you see the precise financial outcome before you approach your lender, so you can walk into that conversation knowing exactly what to expect.