Mortgage Recast vs Refinance
Recast: $250-$500 fee, lump-sum reduces principal + reamortize at same rate. Refi: $3-5K closing, new rate. Recast better if rate dropped <1%.
| Original payment | — |
| Recast cost | — |
| Recast new payment | — |
| Recast lifetime savings | — |
| Recast NET | — |
| Refi closing cost | — |
| Refi new payment | — |
| Refi lifetime savings | — |
| Refi NET | — |
| Winner | — |
Mortgage recast vs refinance: recast keeps your current interest rate and reamortizes with a lump-sum reducing principal — cheap ($250-500). Refinance gets a new rate but costs $3,000-5,000 in closing fees. Recast wins if rates have only dropped slightly.
When Recast Wins
Rates haven't dropped much (under 1%). You have a lump sum to apply (sale of stock, inheritance). You want to keep the same rate. Closing cost would eat savings. Lender allows recast (most conventional, FHA, VA don't allow).
When Refinance Wins
Rates dropped 1.5%+ vs current. You want term change (30→15 yrs). You want to remove PMI early. You want cash-out. You'll keep loan 5+ years. Closing cost is recovered via lower monthly + lower interest paid.
Recast Eligibility
Most conventional loans (Fannie/Freddie). Many portfolio loans. Most jumbos. Generally NOT: FHA, VA, USDA loans (refinance required). Loan must be current. Lender approval. Min lump sum often $5K-$10K. Recast happens once per loan typically.
Last updated May 2026. Sources: CFPB Mortgage Recast.