Recast
A mortgage recast re-amortizes your loan after you make a large lump-sum payment toward principal, lowering the monthly payment while keeping the same rate and term.
What Recast means
Unlike a refinance, a recast does not replace the loan or require new underwriting, an appraisal, or closing costs beyond a small fee. You pay down a chunk of principal, and the lender recalculates payments over the remaining term. The interest rate and payoff date stay the same.
Florida example
A Naples homeowner who received a $60,000 bonus applied it to principal and recast a $400,000 loan for a $350 fee. The monthly payment dropped about $380 with no change to the 6.25% rate.
What it is
A recast lowers your monthly payment after you make a large lump-sum payment toward principal. The lender re-figures the payment on the smaller balance.
Your rate and term stay the same.
When it helps
A recast is a low-cost way to cut your payment without a full refinance. It suits owners who come into extra cash.
We explain if a recast beats a refinance for you. Apply now and we will compare both.
Verify the details for your own situation against these government and agency sources: CFPB guide to refinancing and CFPB Owning a Home guide.