How a recast works
A recast (lenders also call it re-amortization) keeps your loan but resets the payment. You send a lump sum, the lender subtracts it from your principal, and then recalculates the monthly payment so the smaller balance is still paid off on the original end date. Your interest rate doesn't change and there's no new loan, appraisal or closing.
Recast or just prepay? A worked example
Say you owe $300,000 at 6.5% with 25 years left, paying $2,025.62 a month, and you put $50,000 toward principal:
- Recast: your payment drops to $1,687.57 and you save $51,081 in interest, before the fee.
- Prepay without recasting: your payment stays at $2,025.62, the loan ends 8 years sooner, and you save $142,831.
Prepaying always saves more, because you keep paying the higher amount. A recast is worth it when a lower required payment matters more to you than the extra savings, for example after selling a previous home, or to give your budget breathing room while keeping the option to pay extra whenever you can.
Example calculated with the same engine as the calculator above.
Before you ask your lender
- Check eligibility. Many conventional loans allow recasts. FHA and VA loans generally don't.
- Ask about the minimum. Servicers often set a minimum lump sum, commonly $5,000 to $10,000 or more.
- Get the fee in writing. It's usually a flat administrative fee, far below refinance closing costs.
- Compare with a refinance only if rates have dropped enough that a new loan beats your current rate. See the refinance break-even calculator.
Recast policies at major servicers
What each servicer publishes about recasting, from its own website or fee schedule:
| Servicer | Minimum lump sum | Fee | Not eligible | Other conditions |
|---|---|---|---|---|
| Bank of America | $5,000 of extra principal in the last 6 months | None | Not stated | First 6 payments made; once every 12 months |
| Chase | No minimum | None stated; "fees may apply" | FHA, VA, USDA | Subject to investor guidelines |
| Flagstar | May require $10,000 | Up to $250 | FHA, VA, USDA, interest-only, option ARMs | Recently transferred loans may wait 90 days |
| Freedom Mortgage | Not published | "Several hundred dollars" | FHA, VA, USDA | Generally no limit on how often |
| PNC | $10,000 | $250 | Many investor-owned loans | Loan at least 6 months old; within 12 months of the lump sum |
| Truist | 10% of the balance, over up to 12 months | $250 (varies by state) | FHA, VA, USDA | At least one payment made |
| U.S. Bank | Not published | $250 | Not stated | Listed as a "recast modification" |
Checked September 23, 2026. Policies change and can depend on who owns your loan, so confirm with your servicer before sending money. "Not published" means we couldn't find the figure on the servicer's own site.
Recast, then keep paying extra
A recast lowers the payment you must make, not the payment you can make. Many borrowers recast after a large lump sum, then keep sending some extra each month. The loan still ends sooner, and if money gets tight the lower required payment is there as a cushion. Model the ongoing extra payments in the extra payment calculator with your new balance.
Weighing a recast against a new loan? Our guide to mortgage recast vs refinance compares the options side by side.
Questions people ask
What is a mortgage recast?
You pay a large lump sum toward principal, and your lender recalculates (re-amortizes) the monthly payment over the time you have left. Your rate and end date stay the same; your payment goes down.
How much does a recast cost?
Lenders that offer recasts usually charge a flat administrative fee, often a few hundred dollars, and many require a minimum lump sum. Ask your servicer for their fee and minimum; there's no appraisal or credit check like a refinance.
Can every loan be recast?
No. Many conventional loans can, but government-backed FHA and VA loans generally can't be recast, and some servicers don't offer it at all. Your servicer can tell you in one call.
Is it better to recast or just pay extra?
Paying the same lump sum without a recast saves more interest, because your payment stays high and the loan ends sooner. A recast trades some of that saving for a lower required payment, which helps if you want more room in your monthly budget.
For education and estimates only; not financial, tax or legal advice. Your lender's figures are final. See How we calculate.