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Finance
Mortgage Recasting Vs Refinancing Calculator
US • 2026 • Mortgage strategy

Mortgage Recasting vs Refinancing Calculator

Compare your new monthly payment, fees, total interest, and a “sell/exit in X years” scenario to see when recasting or refinancing makes more sense.

Inputs

Enter principal & interest details (escrow not included).

Load example:
Current loan
Mortgage recast (re-amortization)
Refinance (rate-and-term)
Comparison settings
Calculator inputs stay on your device (local processing).

Disclaimer: All calculators on this website are provided for informational and illustrative purposes only. The results do not constitute professional advice (including legal, tax, financial, medical, or other advice). Despite careful programming, we assume no liability for the accuracy, completeness, or timeliness of the results. For matters requiring professional advice, we recommend consulting an appropriate specialist (e.g., a tax advisor, lawyer, accountant, or physician).

Results

Payment, fees, interest, and horizon-based comparison.

Baseline monthly P&I
$1,752.18
Remaining payoff: 300 months • Total interest: $175,655
Recast
Fee: $300
New monthly P&I
$1,501.87
Payment change
-$250.31
Upfront cash
$50,300
Break-even (fee vs payment)
2 mo
Total interest (life): $150,561 • Payoff: 300 months
Refinance
Closing: $9,000
New monthly P&I
$2,210.42
Payment change
$458.24
Upfront cash
$0
Break-even (costs vs payment)
—
Total interest (life): $436,753 • Payoff: 360 months
Horizon comparison (sell/exit in 7 years)
Baseline
$358,186
Interest+Balance
Recast
$307,316
Fee+Interest+Balance
Refinance
$482,117
Costs+Interest+Balance
Lowest horizon cost: Recast. Lowest monthly payment: Recast.
Important: This calculator estimates principal & interest only and is not financial advice. Eligibility, fees, and exact terms vary by lender/servicer.

Notes & methodology

What this calculator compares


This tool compares three scenarios using month‑by‑month amortization:


1. Keep current loan (baseline) — same rate, same remaining term.

2. Mortgage recast (re-amortization) — you make a lump-sum principal payment, then your servicer recalculates the monthly principal+interest (P&I) payment using the same rate and same remaining term.

3. Refinance (rate-and-term) — your current loan is replaced with a new one (new rate, new term) and you pay closing costs (either out of pocket or financed).


The calculator shows:


•New monthly P&I payment
•Total interest (life of loan)
•Time-horizon comparison (e.g., “if I sell in 7 years”)
•Break-even month based on payment savings vs fees

Key difference: recast lowers payment by lowering principal; refinance lowers payment by changing the rate/term


Recast only changes the payment schedule. It does *not* change your interest rate.


Refinance can change:


•interest rate (APR),
•term length (e.g., 30→15 or reset to 30),
•loan type (e.g., ARM→fixed),
•and possibly add cash-out (not modeled here).

How the math works (amortization)


For a fixed-rate loan, the scheduled monthly payment is computed with the standard amortization formula:


\[

M = \frac{P\cdot r}{1 - (1+r)^{-n}}

\]


Where:


•P = principal (loan balance)
•r = monthly rate (APR/12)
•n = number of remaining monthly payments

Then we simulate each month’s interest and principal and build a detailed schedule.


Break-even: what we mean here


This calculator reports a payment break-even:


\[

\text{Break-even months} \approx \frac{\text{Fees}}{\text{Monthly P\&I savings}}

\]


This is a quick rule of thumb. It ignores potential differences in:


•how quickly principal is paid down (equity),
•and how long you actually keep the loan.

That’s why we also show a time-horizon comparison using:


fees + interest paid + remaining balance at horizon (assuming you exit/sell at that time).


How to pick the time horizon


If you might sell, move, or refinance again in a few years, your time horizon is the most important input.


Examples:


•Planning to move in ~3 years → break-even needs to be short, or recast may be better.
•Planning to stay 10+ years → refinance can win if the rate drop is meaningful, even with higher upfront fees.

Practical notes (eligibility & limitations)


•Not all loans can be recast. Many lenders only allow it for conventional loans, not FHA/VA/USDA.
•Recast usually requires a minimum lump sum and a **small fee** (varies by servicer).
•Refinancing typically involves underwriting, appraisal, and a full closing process.

This calculator models principal & interest only (P&I). It does not include taxes/insurance (escrow), PMI, or prepayment penalties.


Decision checklist (fast rules)


Use these quick heuristics after you run your own numbers:


Recast tends to be better when:


•Your current interest rate is lower than today’s refinance offers (you want to keep it).
•You have a meaningful lump sum and want a lower payment without a full closing.
•Recast fee is small and you want immediate simplicity (no appraisal/underwriting in many cases).

Refinance tends to be better when:


•You can get a meaningfully lower rate and expect to keep the loan beyond the break-even point.
•You want to change the term (e.g., 30→15 or reset to 30) or switch loan type.

Always check your time horizon:


•If you might sell or refinance again soon (e.g., 2–5 years), high closing costs can dominate.

Worked examples (copy/paste presets)


These are illustrative scenarios you can paste into the calculator to sanity-check behavior:


#### Example 1 — Low locked-in rate (recast often wins)


Input
Value
Remaining balance
$350,000
Current APR
3.25%
Remaining term
25 years
Recast lump sum
$50,000
Recast fee
$300
Refi APR
6.25%
Refi term
30 years
Closing costs
$9,000
Finance closing costs
Yes
Time horizon
7 years

#### Example 2 — High current rate + long horizon (refi can win)


Input
Value
Remaining balance
$320,000
Current APR
7.25%
Remaining term
28 years
Recast lump sum
$10,000
Recast fee
$300
Refi APR
5.75%
Refi term
30 years
Closing costs
$9,500
Finance closing costs
No
Time horizon
10 years

#### Example 3 — Short horizon (fees matter a lot)


Input
Value
Remaining balance
$250,000
Current APR
4.75%
Remaining term
22 years
Recast lump sum
$25,000
Recast fee
$300
Refi APR
4.25%
Refi term
30 years
Closing costs
$10,000
Finance closing costs
Yes
Time horizon
3 years

Related tools (internal links)


•Long-term housing costs: [HOA Long-term Impact Calculator](/us/finance/hoa-long-term-impact-calculator)
•Tax planning: [US Tax Tools](/us/taxes)
•Itemizing deductions (mortgage interest context): [Standard vs Itemized Deductions](/us/taxes/standard-vs-itemized-deductions)
•Budgeting monthly cashflow: [US Paycheck Calculator](/us/salary/paycheck-calculator)

FAQ (7)

Is a mortgage recast the same as refinancing?

No. A recast keeps your current loan (same rate, same remaining term) and recalculates the payment after a large principal reduction. Refinancing replaces the loan with a new one, usually with new rate/term and closing costs.

Does a recast reduce interest, or only the monthly payment?

It usually does both: reducing principal earlier reduces the interest that accrues over time, and the new payment is calculated on the lower balance. The exact interest savings depends on your remaining term and rate.

How do closing costs affect refinance savings?

Closing costs are an upfront cost (paid in cash or financed). They can delay the break-even point. This calculator shows both the payment break-even and a time-horizon comparison.

If I finance closing costs, are they 'free'?

No. Financing closing costs increases the new loan balance, which usually increases the payment and the interest paid over time. It can still make sense if cash is tight, but the costs are real.

What if my current monthly payment includes taxes and insurance?

Most mortgage statements include escrow (taxes/insurance). This calculator focuses on principal+interest (P&I) so you can compare loan mechanics. Escrow typically doesn’t change with recasting, and refinancing may change escrow depending on your setup.

Should I include extra monthly principal payments?

If you consistently pay extra principal, include it. Extra principal changes payoff time and total interest for all scenarios, and it can materially shift the comparison.

Is the 'sell at horizon' comparison realistic?

It’s a simplified but useful way to compare strategies over a fixed time period. It assumes you exit the loan at that month and treat the remaining balance as something you must pay off (typically from sale proceeds). Home price changes, taxes, and transaction costs are not modeled.