Mortgage Recasting vs Curtailment Comparison 2027
Compare mortgage recasting (resets monthly payment) vs curtailment (keeps payment, shortens term) 2027 — different math, different goals.
Recast Mechanics
Make lump-sum extra payment. Lender RECALCULATES new (lower) monthly payment based on remaining balance + remaining term. One-time fee $150-500.
Curtailment Mechanics
Make extra payment, keep same monthly payment. Future payments still come out at original amount but have MORE going to principal (lower balance = less interest).
When Recast Wins
Job loss expected. Want cash flow flexibility. Income tighter. Lower payment = stress relief.
When Curtail Wins
Mathematically saves more interest. Faster payoff. Total cost lower. Discipline-friendly (forced higher effective payment).
Source: fanniemae.com Selling Guide B2-1.4-04, cfpb.gov mortgage. Last updated: May 2026.
Frequently Asked Questions
Does FHA allow recast?
Generally NO. Government loans (FHA, VA, USDA) don't recast. Only conventional loans. Confirm with servicer.
Better than refinancing?
Recast cheaper ($300 vs $10k closing). But keeps original rate. Refi worth it only if rate drops 1%+ AND closing costs recoverable.
How often can I recast?
Most lenders limit to 1-2 times per loan. Minimum lump payment usually $5-10k. Check servicer rules.