Quick answer
A mortgage recast (re-amortization) is when you make a large lump-sum payment toward principal and the servicer recalculates your monthly payment over the remaining term based on the new, lower balance. The interest rate and payoff date stay the same.
Key facts
7.24%
30-year fixed average (used in the example)
Freddie Mac Primary Mortgage Market Survey · Week of Oct 29, 2026
Example
You took a $300,000 30-year loan at 7.24% with a payment of $2,044. Five years in, you owe $283,107 and pay down $50,000 — say, from the sale of a previous home. After a recast, the payment on the remaining $233,107 drops to $1,683, saving $361 a month for the last 25 years.
Without a recast, the same lump sum keeps the payment at $2,044 but pays the loan off in about 16 years instead of 25. Recasting buys monthly breathing room; skipping it saves more interest.
Recast vs refinance
A recast keeps your existing loan, so there’s no new application or closing costs — usually just a servicer fee. It can’t lower your rate, though; only a refinance does that. Not every loan or servicer offers recasting, and servicers set their own minimum lump sums, so ask yours before you send the money. The extra payment calculator shows the payoff side of the trade-off, and the amortization schedule shows why early principal saves the most interest.
Sources
- Freddie Mac Primary Mortgage Market Survey — 30-year fixed rate, national weekly average (Week of Oct 29, 2026)
- Fannie Mae: Re-amortized (recast) mortgages
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.