What is a mortgage recast?
A recast (or re-amortization) is when you pay a large lump sum toward principal and your lender recalculates the monthly payment over the same remaining term at the same interest rate. Unlike a refinance, there is no new loan, no credit check and usually only a small fee (often $150–$500).
- Recast: lower monthly payment, same payoff date. Good when you want breathing room in your budget.
- Prepay without recasting: same payment, earlier payoff, and slightly more interest saved.
- Eligibility: most conventional loans allow it, often with a minimum lump sum (commonly $5,000–$10,000). FHA, VA and USDA loans usually cannot be recast.
Ask your servicer for the exact fee, the minimum payment and how long the recast takes to process before you send the money.