Refinance vs Recast Calculator

About this calculator

Refinancing a mortgage replaces your existing loan with a brand-new one — usually at a new interest rate and term — while a recast (also called re-amortization) keeps your original loan and interest rate but re-calculates the monthly payment after you make a large lump-sum payment toward principal, spreading the now-smaller balance over the remaining original term. Refinancing typically involves a credit check, appraisal, and closing costs of roughly 2-5% of the loan amount, while recasting usually only costs a small flat administrative fee (often a few hundred dollars) charged by the loan servicer.

Homeowners who receive a windfall — an inheritance, bonus, or home sale proceeds — and want a lower monthly payment use this comparison to decide between the two paths: refinancing makes sense when current market rates are meaningfully lower than your existing rate, while recasting makes sense when you already have a good rate and just want to reduce your payment using cash you already have, without resetting the loan term or paying refinance closing costs.

This calculator takes your current loan balance, remaining term, interest rate, and a hypothetical lump-sum payment, along with a refinance rate and its closing costs, and compares the resulting new monthly payment under each option so you can see which lowers your payment more for your specific numbers.