What Is a Mortgage Recast? How Re-Amortization Works

Updated 2026-07-03 · General education, not financial advice

What a mortgage recast actually is

A mortgage recast is a way to lower your monthly payment without refinancing. You make a one-time lump-sum payment toward your loan's principal, and your servicer then re-amortizes the loan — recalculating your monthly payment based on the new, lower balance. This is sometimes called "re-amortization," and it's a much simpler process than getting a new loan.

The key to understanding a recast is what stays the same versus what changes. A recast holds three invariants:

• Your interest rate does not change. You keep the exact rate you already have. That's a major reason recasting appeals to people who locked in a low rate.
• Your payoff date does not change. The number of remaining payments stays the same. If you had 20 years left before the recast, you have 20 years left after it.
• Only your monthly payment changes — and it goes down. Because you now owe less but have the same amount of time to pay it off, each monthly payment is smaller.

Because the rate and term are untouched, a recast is not a new loan. There is no credit check, no appraisal, and no new closing — the fundamental difference from a refinance, where you replace your mortgage entirely.

A step-by-step example (illustrative)

Here's how the math works. The figures below are illustrative only — your own numbers will differ.

Imagine you took out a $350,000 loan at a 6.8% fixed rate. After 10 years of on-time payments, your balance has fallen to roughly $298,915, with 20 years remaining on the term. Then you come into $50,000 — from a bonus, a home sale, or an inheritance — and decide to recast.

1. You apply the $50,000 lump sum to principal, reducing your balance from about $298,915 to roughly $248,915.
2. Your servicer re-amortizes that lower balance over the same remaining 20 years, at the same 6.8% rate.
3. Your monthly principal-and-interest payment drops by roughly $380 per month.

Notice what didn't move: the rate is still 6.8%, and the loan still pays off on the original schedule. You simply have a smaller required payment for the rest of the term. You can estimate your own result with our recast calculator.

How to request a recast

Here is the single most important thing to know, and the mistake that trips people up: you usually have to ask for a recast first. Most servicers require you to submit a recast request or form before or along with your lump-sum payment. Simply sending in a large extra principal payment does not automatically trigger a recast — without the request, the servicer typically just applies the money to your balance and leaves your monthly payment unchanged.

The general process looks like this:

• Confirm eligibility and seasoning. Your loan must be current, and servicers typically want to see 2 to 6 on-time payments before they'll recast.
• Submit the recast request. Contact your servicer for their form and instructions, and make the qualifying lump-sum payment as directed.
• Wait for processing. Re-amortization commonly takes about 30 to 60 days, after which your new, lower payment takes effect.

Because policies and paperwork vary widely from one company to the next, it pays to check the specifics before you send money. See our roundup of lender recast policies for how different servicers handle the process.

What a recast costs and the minimum lump sum

Recasting is inexpensive compared with refinancing. The costs and thresholds below are typical ranges, not quotes:

• Recast fee: usually $150 to $500. A few large banks have reported offering recasts with no fee at all.
• Minimum lump sum: commonly $5,000 to $10,000. Some servicers instead require a minimum equal to about 10% of the current balance.

There are no origination fees, appraisal costs, or title charges, because you aren't taking out a new loan. For most borrowers, that makes the total out-of-pocket cost a small fraction of what a refinance would run.

Which loans qualify for a recast

Not every mortgage can be recast. Eligibility depends mostly on your loan type:

If you have a government-backed loan and want a lower payment, recasting generally isn't available — a refinance or extra principal payments may be your realistic options instead. Always confirm your specific loan's eligibility with your servicer, since programs and overlays differ.

Recast vs. the alternatives

A recast is one of several ways to put a lump sum to work on your mortgage, and it isn't always the best one. If current rates are lower than yours, a recast vs refinance comparison may point you toward refinancing instead. If you're weighing whether to recast at all or just keep chipping away at the balance, our recast vs extra principal guide breaks down how each approach affects your payment, your payoff date, and your total interest. When you're ready to see real numbers for your own loan, start with the recast calculator.

This article is for general information only and is not financial advice — always confirm eligibility, fees, and requirements with your own servicer before making a lump-sum payment.