Refinance vs Recast Calculator
Compare recasting your mortgage versus refinancing with a lump-sum payment
Last updated: November 2025
Current Loan
Lump Sum
Applied in both recast and refinance scenarios
Most servicers charge $150 to $500
Refinance Terms
Typically 2-5% of new loan amount. Suggested: $7,500
Refinance Recommended
Refinance saves $38,590 over the life of the loan and you break even on closing costs in 48 months.
Side-by-Side Comparison
| Metric | Do Nothing | Recast | Refinance |
|---|---|---|---|
| Monthly Payment | $2,026 | $1,688 | $1,535 |
| Total Interest Remaining | $307,686 | $256,405 | $210,566 |
| Upfront Out-of-Pocket | $0 | $50,250 | $57,500 |
| Total Cost | $607,686 | $556,655 | $518,066 |
Cumulative Cost Over Time
Recast vs Refinance at a Glance
Understanding Recast vs Refinance
How a Mortgage Recast Works
A recast (also called re-amortization) takes a lump-sum principal payment, applies it to your loan balance, and then recalculates your monthly payment over the remaining original term. Your interest rate and payoff date stay the same. There is no underwriting, no appraisal, and no credit check. The servicer charges a flat fee, usually $150 to $500, and you get a lower monthly payment within 60 to 90 days. The trade-off is that recasting does not shorten the loan term, you simply pay less per month for the rest of the schedule.
How a Refinance Works
A refinance pays off your existing mortgage and originates a new one. You can change the interest rate, the term, and the balance. Closing costs typically run 2 to 5 percent of the new loan and include an appraisal, title insurance, origination fees, and prepaid interest. Refinancing is the right move when current market rates are well below your existing rate (a common threshold is 0.75 percentage points or more) and you plan to stay in the home long enough to recoup the closing costs.
When Each Option Wins
Recasting wins when you have cash to put down and your existing rate is already competitive. Refinancing wins when rates have fallen enough that the new monthly savings recover the closing costs within the time you plan to stay. If you are unsure how long you will stay in the home, recasting is the safer choice because it preserves optionality, you can always refinance later if rates drop further.
A Third Option: Extra Principal
If your servicer does not offer recasting (FHA, VA, and USDA loans typically cannot recast), you can simply apply the lump sum as an extra principal payment. Your monthly payment will not change, but the loan will pay off faster and you will save substantial interest. This is the simplest approach when you have a low rate locked in and just want to retire the debt sooner.
Frequently Asked Questions
What is the difference between a mortgage recast and a refinance?
A recast keeps your existing loan, rate, and term, but applies a lump-sum principal payment and recalculates your monthly payment over the remaining schedule. A refinance replaces your existing loan with a new one at a new rate, term, and balance, and requires full underwriting plus closing costs of 2 to 5 percent of the loan. Recast is faster, cheaper, and does not require a credit check; refinance can dramatically change your rate and term.
How much does a mortgage recast cost?
Most servicers charge a flat recast fee between $150 and $500. There is no appraisal, no title insurance, no origination fee, and no credit pull. Compare that to refinance closing costs that typically run 2 to 5 percent of the new loan, or roughly $6,000 to $15,000 on a $300,000 mortgage.
When does a recast win over a refinance?
A recast wins when you have a large lump sum to put down (an inheritance, bonus, or home-sale proceeds) and current refinance rates are at or above your existing rate. Since recasting keeps your low rate, you avoid trading it for a higher one. Recasting also wins when you do not want to restart the clock on a 30-year term or pay thousands in closing costs.
Will my lender allow a recast?
Not all servicers offer recasting. Most conventional Fannie Mae and Freddie Mac loans qualify, but FHA, VA, and USDA loans typically cannot be recast. Jumbo loans vary by lender. Servicers usually require a minimum principal reduction (often $5,000 to $10,000) and that you be current on payments. Call your servicer and ask for the "loan recasting" or "re-amortization" department.
Can FHA or VA loans be recast?
No. FHA, VA, and USDA loans do not allow recasting because their amortization schedules are tied to the original loan terms. To lower your payment on an FHA or VA loan, your options are an FHA Streamline refinance, a VA Interest Rate Reduction Refinance Loan (IRRRL), a full conventional refinance, or simply making extra principal payments (which shortens the term but does not lower the payment).
What closing costs are included in a refinance?
Refinance closing costs typically include an origination fee (0.5 to 1 percent of the loan), appraisal ($400 to $700), title search and lender title insurance ($700 to $1,200), credit report ($30 to $60), recording fees ($100 to $250), prepaid interest, and any discount points you buy. Total runs 2 to 5 percent of the loan amount. Some lenders offer a no-closing-cost option that rolls fees into the rate (typically 0.25 to 0.5 percent higher).