A mortgage recast allows some borrowers to make a large principal payment and have the lender recalculate the monthly payment based on the remaining balance and original loan term.
How a recast works
With a recast, the borrower pays down a portion of the principal. The lender then recalculates the payment using the lower balance while keeping the original interest rate and remaining loan term.
Recast vs. refinance
- A recast keeps the existing loan
- A refinance replaces the existing loan
- A recast may have lower fees than refinancing
- A refinance may change the rate, term, or loan type
- A recast usually requires a large principal payment
Not sure whether refinancing or another option makes more sense?
When a recast may be considered
- You sold another property and have cash available
- You received a large bonus or payout
- You want a lower payment without refinancing
- Your current interest rate is favorable
- You want to reduce principal but keep your loan
When a recast may not be available
Not all loans are eligible for recasting. Some government-backed loans may not allow it, and lender requirements vary. Borrowers should contact their loan servicer to confirm availability, fees, and rules.
Review options before making a major loan decision.
Get StartedMortgage recast availability, fees, eligibility, and payment changes vary by lender, servicer, loan type, and account status.