Real Estate

Mortgage Recast Calculator (Lump Sum to Lower the Payment)

Enter your original loan details, payments made and the lump sum.

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Symbol only: enter amounts in the currency you pick.
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Current payment
Current payment
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Payment after recast
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Monthly saving
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Balance before the lump sum
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Interest saved over the remaining term (after the fee)
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Mortgage Recast Calculator (Lump Sum to Lower the Payment) by TheCalcTools

How the Mortgage Recast Calculator (Lump Sum to Lower the Payment) works

A recast re-amortises the remaining balance after a large principal payment over the same remaining term, so the payment falls while the rate and end date stay the same.

Not every loan allows it: many conventional loans do, while FHA and VA loans generally do not. Lenders typically require a minimum lump sum and charge a small fee.

The formula

New payment = (balance − lump sum) × i ÷ (1 − (1 + i)^−remaining)

Worked example

Using the default values shown in the calculator:

Original loan amount$400000
Interest rate6.5 %
Original term (years)30
Payments already made60
Lump sum toward principal$50000
Recast fee$250
  1. After 60 payments on 400,000 at 6.5%, the balance is $374,443.91.
  2. Paying 50,000 and recasting lowers the payment from $2,528.27 to $2,190.67.

Result:

Current payment$2,528.27
Payment after recast$2,190.67
Monthly saving$337.60
Balance before the lump sum$374,443.91
Interest saved over the remaining term (after the fee)$51,031.07

Frequently asked questions

Recast or refinance?

A recast keeps your rate and costs little. Refinancing can change the rate and term but has closing costs.

Sources and further reading

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This calculator gives estimates for information only. It is not financial advice, and your lender's or provider's figures will govern. Rates, fees and rules vary. See our disclaimer.