Give your servicer a lump sum and a small fee. They spread what is left over the months you already had: the same rate, the same payoff date, a smaller payment. Enter your numbers to see the new payment, and what the same cash does if you skip the recast.
One pile of cash, three ledgers. Only one of them changes your required payment, and it is not the one that saves the most.
| Road | Payment | Payoff | Interest | Kept |
|---|---|---|---|---|
| Do nothingKeep the schedule and the cash | … | … | … | … |
| RecastThe lump and the fee, then the new payment | …Lowest payment | … | … | … |
| Prepay, no recastThe same lump, the old payment | … | … | … | …Most kept |
All three rows spend the same money. The interest kept in rows 2 and 3 comes from the principal the lump removes; the row you pick decides only how much of it you keep.
Step 3
A recast is a request, not a right. Ask first, send the lump, then decide which payment to keep.
The link holds your loan, the lump, the month and the fee, so a bookmark keeps them. The reminder is a calendar file your device makes; nothing is sent.
How the new payment is worked out, and the check that a recast plus your old payment equals prepaying.
The same cash, three moves.
Same cash, three moves. Dollar figures use the example: a $50,000 lump on the $400,000 at 6.5% / 30-year loan, one year in, with a $250 recast fee. Run your own numbers above.
Send the lump to principal, skip the recast, keep paying what you already pay. Nothing about your bill changes. But the loan ends 8 yrs 2 mos sooner (May 2048 instead of Jul 2056), and the interest saved is $198,884: more than three times the recast’s $61,223. No fee, no paperwork, no permission: every servicer must accept principal-only payments. If you don’t need a lower bill, this is the whole answer.
Recast, accept the lower required payment, and voluntarily keep sending the old $2,528.27. Your balance now tracks strategy #1 to the penny: same May 2048 finish, same $198,884 kept, minus the $250 fee. What the fee bought is a permanently lower floor: any month life gets expensive, you can drop to $2,208.67 without asking anyone. Cheap insurance if your income is lumpy; pointless if you’d never use it.
Sometimes the point isn’t the interest; it’s the bill. One income now, a new kid, retirement on the horizon: freeing $319.60 every month can matter more than finishing early. The lump still saves $61,223 against doing nothing, the rate you locked stays locked, and the loan still ends on the original date. Just make the choice with the ledger open: the relief costs $137,661 of the savings your lump could have earned.
Each answer below uses your loan and what you pay now. Open a tool to change the rest; your numbers carry over.
RecastYou are here
When does the loan end now?
Try any extra amount, one-time payments or bi-weekly, and watch the date move.
Open the payoff calculatorSee every payment?
Every payment, split into interest and principal, with the rows an extra amount deletes.
Open the scheduleDebt-free in 20 years?
Or pay $61,225 once, today. Any other month works too.
Pick a dateDebt-free by age 65?
This line uses an example birthday, Jun 1985. The tool uses yours.
Price it in birthdaysInvest the $200 instead?
Assumes 7% a year after tax, to Jul 2056. Paying extra earns a guaranteed 6.5%; the 7% is not guaranteed.
Race the two roadsPay half every 2 weeks?
The loan ends 5 yrs 10 mos sooner. 26 half payments a year equal 13 full payments.
Run the true calendarRefinance at 5.5%?
The usual formula says 25. This line uses an example offer: 5.5% and $6,000 in costs, rolled in, a year from now.
Price an offerPay off the loan a year from now?
Your statement would show $395,529.10. The payoff adds 14 days of interest at $70.44 a day.
Price the payoffWhen can PMI stop?
Without a request it stops at payment #102. This line uses an example home value of $450,000.
Find both datesA recast (re-amortization) is simple. You make a lump-sum principal payment. Your servicer then recomputes the monthly payment on the smaller balance, over the months remaining, at your existing rate. On the example loan, $50,000 a year in drops the payment from $2,528.27 to $2,208.67. The term, the rate, and the payoff date don’t change; only the required payment does.
A refinance replaces your loan: new rate, new term, closing costs, a credit check, an appraisal. A recast keeps the loan you have and just re-spreads the smaller balance, for a small fee and no underwriting. That cuts both ways. If you locked a rate below today’s market, a recast lowers your payment without giving up that rate. That is often the whole reason to prefer it. If your rate is above market, a recast can’t fix it; run refinance math instead.
Some, but be precise about why. The lump sum saves the interest, not the recast. Put $50,000 on the example loan and pay the new lower minimum: you save $61,223 versus doing nothing. Put the same $50,000 down and keep the old payment instead: you save $198,884. The recast, taken as a lower payment, gives back $137,661 of what the lump could have earned. That can still be the right trade; it’s just a trade, not a bonus.
Decide what the money is for. If you want the loan gone and the most interest saved, prepay and keep your payment: no fee, no minimum, works on every loan. If you need the required payment lower (cash flow, one income, retirement), that’s exactly what a recast is for. Want both? Recast, then keep paying the old amount by choice. Your schedule matches plain prepaying to the penny, and the fee buys you the option to pay less in a hard month.
No. Government-backed loans (FHA, VA, USDA) generally can’t be recast; conventional loans usually can, and jumbo or portfolio loans depend on the lender. Servicers also set minimum lump sums, commonly $5,000 to $10,000. Call yours and ask for their recast (“re-amortization”) terms: the minimum, the fee, and how long processing takes.
Typically $150 to $500, charged once; some servicers waive it. Processing commonly runs several weeks to a couple of billing cycles. Keep paying your current amount until the new payment shows up on a statement; a quoted figure isn’t a changed loan.
Neither. The rate you have is the rate you keep. The final payment stays scheduled for the same month it always was: Jul 2056 on the example loan, with or without the recast. A recast changes one number: the payment. If you want the date to move, that’s what extra principal does; the payoff calculator shows it.