Mortgage Recast Calculator (Lump Sum to Lower the Payment)
Enter your original loan details, payments made and the lump sum.
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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
Worked example
Using the default values shown in the calculator:
| Original loan amount | $400000 |
|---|---|
| Interest rate | 6.5 % |
| Original term (years) | 30 |
| Payments already made | 60 |
| Lump sum toward principal | $50000 |
| Recast fee | $250 |
- After 60 payments on 400,000 at 6.5%, the balance is $374,443.91.
- 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.