Mortgage Recast vs Refinance Comparison
Mortgage recasting re-amortizes your existing loan after a lump-sum principal payment — no closing costs, no new appraisal, no new interest rate. Compare to refinancing.
| Current | |
| Current monthly payment | — |
| Recast (apply lump sum, re-amortize) | |
| New balance after lump sum | — |
| New monthly payment | — |
| Recast cost | — |
| Total remaining interest | — |
| Refinance (new loan, new rate) | |
| New balance (rolled closing costs) | — |
| New monthly payment | — |
| Refi closing costs | — |
| Total remaining interest | — |
Mortgage recasting (a.k.a. re-amortization) applies a lump-sum principal payment to your existing loan and recalculates your monthly payment based on the new lower balance — at your existing interest rate. Closing costs are minimal ($0-500). Refinancing replaces your loan entirely with a new one at a new rate, requiring an appraisal, credit check, and $3,000-8,000 in closing costs. This calculator quantifies which option saves more given your numbers.
When Recasting Beats Refinancing
Recasting wins when your current rate is at or below today's market rate. Why give up a 4.5% mortgage from 2021 to refinance at 6.5% in 2026? Recast your existing 4.5% loan with the lump sum and keep your low rate forever. Recasting also wins for borrowers who don't want to restart the loan clock — refinancing creates a new 30-year term, while recasting keeps your existing term and end date. No credit check, no appraisal, no income verification.
When Refinancing Wins
Refinancing wins when current rates are meaningfully below your existing rate (typically 0.75%+ lower). The closing costs are amortized across the lower-rate savings, so longer holders benefit more. Refinancing also lets you change the loan term, switch from ARM to fixed, drop PMI by reaching 80% LTV, or extract cash through cash-out refinancing. None of those are possible with recasting.
Recast Eligibility
Not all loans allow recasting. Eligible: most conventional Fannie Mae and Freddie Mac loans, some jumbo loans, portfolio loans held by community banks. Not eligible: FHA, VA, USDA loans (federal program rules forbid recasting). Most lenders require a minimum lump sum of $5,000-10,000 to recast. The fee is typically $0-500. Note that you can recast multiple times during your loan term as long as eligibility rules are met.
Last updated May 2026. Sources: CFPB Ask CFPB.