What Is a Mortgage Recast? How Re-Amortization Lowers Your Payment

A recast lets you make a lump-sum payment and lower your monthly mortgage — without refinancing. Here's how it works, what it costs, and when it makes sense.

Written by Jordan Ellery, Personal-finance writer · Reviewed by Priya Nadella, CPA, Certified Public Accountant (reviewer) · Updated July 2026

What a mortgage recast actually does

A mortgage recast, sometimes called re-amortization, is when your lender recalculates your monthly payment after you make a large lump-sum payment toward the principal. Your interest rate and your remaining loan term stay exactly the same — only the monthly payment goes down, because the same term now amortizes a smaller balance.

Say you owe $300,000 at 6.5% with 28 years left, and you pay $50,000 toward principal. Your lender re-amortizes the remaining $250,000 over the same 28 years at the same 6.5%. The payment drops by roughly $330 a month, permanently, and you'll pay less total interest over the life of the loan. You can confirm the exact numbers for your situation with our mortgage recast calculator.

What a recast costs and who qualifies

Recasting is cheap compared with refinancing. Most lenders charge a flat fee — often $150 to $500 — and require a minimum lump sum (commonly $5,000 to $10,000). There's no new loan application, no credit check, no appraisal, and no closing costs.

Not every loan is eligible, though. Conventional loans usually allow recasting; government-backed loans such as FHA, VA and USDA generally do not. Jumbo-loan rules vary by lender. Always ask your servicer whether your specific loan permits a recast before you send the lump sum.

When a recast makes sense

A recast is a good fit when you have a lump sum — from a bonus, an inheritance, or a home sale — and you already have a good interest rate you don't want to give up. Because refinancing into today's rates might raise your rate, a recast lets you cut your payment while keeping your existing rate.

It's the wrong tool if your main goal is to be debt-free faster (extra principal payments do that better) or to lower your rate (only a refinance does that). Compare all three approaches in our guide to recast vs. refinance.

Informational only — not financial or tax advice. This article is general educational information and may not reflect current figures or your individual situation. Tax and financial rules change; verify with the IRS or a qualified professional before acting.