Recast vs. Refinance Calculator
You have a lump sum and want a lower monthly payment. Should you recast (keep your loan, apply the cash to principal, and re-amortize at the same rate) or refinance (a new loan at a new rate and term)? Enter your numbers below — everything recalculates live.
Your current loan
Recast option
Refinance option
Monthly principal & interest
Side-by-side comparison
| Scenario | Monthly P&I | vs. do nothing | Loan term | Total remaining interest | Cash needed up front |
|---|---|---|---|---|---|
| Do nothing | — | — | — | — | — |
| Recast | — | — | — | — | — |
| Refinance | — | — | — | — | — |
Total remaining interest is what you will still pay over the life of each option from today forward. Cash up front is money out of your pocket now (the lump sum is out of pocket in every option that uses it, plus fees).
How this works
All three options start from the same monthly payment formula. For a balance P at an annual rate over n months, the payment is P · r / (1 − (1 + r)−n), where r is the monthly rate (annual rate ÷ 12). Total interest over an option is simply its payment × number of months − the amount financed.
- Do nothing — you keep paying your current balance at your current rate over the months remaining.
- Recast — you hand the lender your lump sum, they subtract it from principal and re-amortize the smaller balance over the same remaining term at the same rate. Your rate never changes; only the payment drops. The lender charges a small recast (re-amortization) fee.
- Refinance — you take out a brand-new loan at today's rate for a new term (often 360 months). Closing costs are either paid in cash or rolled into the new balance.
Comparing monthly payments alone is misleading when the terms differ. A refinance that resets your clock to a fresh 360 months can show a lower payment while costing you more total interest, because you are stretching the debt back out. The "total remaining interest" column above is the honest apples-to-apples number. A recast keeps your original payoff date, so it usually wins on lifetime interest even when its monthly payment isn't the lowest.
Assumptions & limitations: figures are principal & interest only — taxes, homeowners and mortgage insurance, and HOA dues are excluded. We assume a fixed rate with no prepayment penalty and that your lender permits recasting (not all loans do; FHA, VA, and USDA loans generally cannot be recast). The lump sum is treated as fully applied to principal at the moment of recast/refinance. We ignore the time value of money, tax effects of mortgage interest, and any difference in what you could earn by investing the lump sum instead. Break-even compares the refinance payment against the recast payment only. These are educational estimates, not financial advice — confirm exact fees, rate, and eligibility with your lender.