Mortgage Recast vs Refinance 2027 Calculator

Compare mortgage recast (lump sum + payment recalculation, same rate) vs full refinance (new loan, new rate, closing costs) for 2027.

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Recast Mechanics

Make lump-sum principal payment (typically $5k+ minimum), lender recalculates payment based on remaining balance + remaining term + EXISTING rate. Closing cost ~$150-$500. Term length unchanged (still finish original schedule).

Refi Mechanics

New loan replaces old loan. Pay closing costs (1-3% of loan), get new rate (could be lower or higher), reset term. Useful if rates DROP — saves money. Useless if rates rose since origination.

When Recast Wins

Your current rate is BELOW market (locked in low). Got windfall (bonus, inheritance, equity from sale). Want lower payment without losing low rate. Don't qualify for refi due to income/credit drop.

When Refi Wins

Rates dropped 0.75%+ below your current rate. Need to extend term (e.g., 25 → 30 yr to lower payment). Cash-out needed. Want to switch ARM to fixed.

Source: Freddie Mac/Fannie Mae recast guidelines. Last updated: May 2026.