Reamortize Calculator
Refinancing is not the only way to lower a mortgage payment. If you come into a lump sum, an inheritance, a bonus, or proceeds from selling another home, you can hand it to your servicer and ask them to reamortize the loan: they recalculate your monthly payment over the remaining term at your existing rate. This reamortize calculator shows the new payment, the monthly savings, the total interest saved, and how fast the small recast fee pays for itself.
Quick Answer
A $300,000 balance at 6.5% with 25 years left costs $2,025.62 a month. Put $50,000 down and reamortize, and the payment drops to $1,688.02: $337.60 back in your pocket every month. Over the remaining term that saves $51,031 in interest after the lump sum and a $250 fee, which breaks even in under a month. The rate and the payoff date never change.
- Reamortize and recast are the same thing. Lenders say “recast”; the math is re-amortization: same rate, same term, lower payment.
- It beats refinancing when your rate is already good. No appraisal, no credit check, no income verification, and a fee in the hundreds instead of thousands.
- Extra payments save more interest but never lower the bill. The same $50,000 as a plain prepayment kills the loan years early but leaves the $2,025.62 payment untouched.
- Government loans are usually excluded. FHA, VA, and USDA loans generally cannot be recast; conventional Fannie Mae and Freddie Mac loans can.
Recast and reamortize are the same move
When you make a large principal payment and ask the servicer to recalculate, they take the new lower balance and spread it over your remaining original term at your existing rate. That recalculation is re-amortization. Your interest rate does not change, your payoff date does not change, and there is no new loan. Fannie Mae documents the process in its Single-Family Servicing Guide, and servicers typically ask for a minimum lump sum of $5,000 to $10,000 plus a flat fee.
The worked example shows the proportionality: cutting the balance by one-sixth ($50,000 of $300,000) cuts the payment by almost exactly one-sixth ($337.60 of $2,025.62). To model the current payment first, use our mortgage payment calculator.
When recasting beats refinancing
The comparison is simple once you see the trade. Refinancing replaces the loan: new rate, new term, 2 to 5% in closing costs, and a reset amortization schedule that restarts the interest-heavy early years. Recasting keeps the loan: same rate, same term, a few hundred dollars in fees, and the payment drops because the balance dropped. Anyone holding a sub-5% loan from 2020-2021 should almost never refinance to chase a lower payment; recasting gets the relief without surrendering the rate. Refinancing wins when rates have fallen meaningfully below your rate (roughly 0.75% or more), when you need to change the loan’s structure (ARM to fixed, term change, cash out), or when you must remove FHA mortgage insurance, which a recast cannot do. Run that side of the decision with our remortgage calculator.
What different lump sums do
The table below runs the tool itself on the worked example ($300,000 at 6.5%, 25 years left, $250 fee) at three lump sums. Because the rate and term are fixed, the payment falls in exact proportion to the balance: each row’s monthly saving is the same share of $2,025.62 as the lump sum is of $300,000.
| Lump sum | New payment | Monthly saving | Total interest saved | Fee break-even |
|---|---|---|---|---|
| $25,000 | $1,856.82 | $168.80 | $25,391 | about 2 months |
| $50,000 | $1,688.02 | $337.60 | $51,031 | under 1 month |
| $100,000 | $1,350.41 | $675.21 | $102,312 | under 1 month |
Recast vs extra payments vs refinance
The same $50,000 can be deployed three ways, and each optimizes something different:
- Payment: drops to $1,688.02
- Term: unchanged, 25 years left
- Interest saved: $51,031
- Cost: $250 fee
- Best when: you need monthly relief
- Payment: stays $2,025.62
- Term: shrinks to about 204 months
- Interest saved: $143,647
- Cost: free
- Best when: you want maximum savings
- Payment: depends on new rate
- Term: resets, often to 30 years
- Interest saved: only if rate drops
- Cost: 2-5% of loan
- Best when: rates fell well below yours
The plain extra payment saves nearly three times the interest because every future payment attacks a smaller balance, but it never lowers the required bill. Our loan payoff time calculator models that path precisely, and the amortization schedule calculator shows both schedules side by side.
Ask your servicer before you pay
The tool gives you the math, but the servicer sets the terms, and those terms decide whether the math can happen at all. Before you send a lump sum, ask four questions and get the answers in writing: does your loan type allow a recast, what is the minimum lump sum, what is the fee, and will the new payment start with the next billing cycle or the one after? Also ask whether your escrow payment changes, since the tool models principal and interest only and your total monthly bill includes escrow. A recast that looks good in the calculator but is not available on your loan is not a plan, so confirm eligibility first and run the numbers second.
What recast calculators get wrong
Most recast calculators print the new payment and stop, which hides the two questions that actually decide the move. First, the break-even: a $250 fee against $337.60 of monthly savings pays back in under a month, but a $500 fee against $40 of savings takes a year, and some calculators never divide the two. Second, the opportunity comparison: they never show what the same lump sum would do as a plain prepayment, so users cannot see they are trading maximum interest savings for monthly relief. This calculator shows both, plus the fee math, because a recast is a cash-flow decision and should be judged like one. One more honest note from the IRS Publication 936 angle: lower payments mean less deductible interest, a small offset worth knowing at tax time.
Frequently Asked Questions
To recalculate your monthly payment after a large principal payment, spreading the new lower balance over your remaining term at the same interest rate. Lenders usually call it a recast; reamortize describes the math.
Typically a flat $150 to $500, and some servicers charge nothing. There is no appraisal, no origination fee, and no title work, which is why it costs a fraction of refinancing.
Most servicers require $5,000 to $10,000 in principal reduction, though policies vary: some set no minimum while others require 10% of the balance. Call your servicer’s loan servicing department and ask for their recast terms.
Neither. The rate stays exactly as it was and the payoff date stays exactly where it was. Only the required monthly payment drops, because the same term now amortizes a smaller balance.
Generally no. FHA, VA, and USDA loans do not allow recasting under their program rules. Conventional loans backed by Fannie Mae and Freddie Mac do, subject to the servicer’s requirements.
Extra payments without a recast save more total interest and shorten the loan, but the monthly bill never drops. Recast if you need cash-flow relief; make plain extra payments if you want the loan gone fastest and can handle the current payment.
Usually once, or very few times; most servicers treat recasting as a one-time event per loan. If you expect multiple windfalls, plain extra payments give you the same interest savings with total flexibility.
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References
- Fannie Mae. Single-Family Servicing Guide
- Freddie Mac. Primary Mortgage Market Survey (PMMS)
- Internal Revenue Service. Publication 936, Home Mortgage Interest Deduction
- Consumer Financial Protection Bureau. Buying a House: Mortgage Tools and Resources
- Consumer Financial Protection Bureau. What is a debt-to-income ratio?
- Consumer Financial Protection Bureau. What is a Qualified Mortgage?
- Board of Governors of the Federal Reserve System. Consumer Credit (G.19)
- Federal Housing Finance Agency. FHFA Announces Conforming Loan Limit Values for 2026
- U.S. Census Bureau. American Community Survey (ACS)
- National Association of Realtors. Existing-Home Sales Housing Statistics