How Much Does It Cost to Recast a Mortgage?
Recasting is famously cheap next to refinancing — but 'cheap' isn't 'free.' Here's the full cost picture: the servicer fee, the minimum you have to put down, and the one real trade-off that matters more than any fee.
The headline number is small. Most lenders charge a one-time recast fee of about $150 to $500, with roughly $250 being typical. That's it for direct costs — no appraisal, no title work, no origination charge, and no credit-check fee. Compared with a refinance, where closing costs commonly run 2% to 6% of the loan amount, a recast is almost an afterthought.
The two numbers to know
Beyond the fee, there's a threshold to clear:
| Item | Typical range | Notes |
|---|---|---|
| Recast / re-amortization fee | $150–$500 | One-time, flat. ~$250 common. |
| Minimum principal payment | $5,000–$10,000 | Some set it as a % of balance. |
| Closing costs | $0 | None — unlike a refinance. |
| Credit-check / appraisal | $0 | Not required to recast. |
The cost that isn't a fee
Here's the part most fee articles skip. The biggest "cost" of recasting isn't the few hundred dollars — it's the interest you give up by not keeping your original payment. Put the same lump sum down and keep paying the old amount, and you'd shorten the term and save more interest overall. Recasting trades some of that saving for a lower required payment. That's a fair trade if you want the lower payment; it's a real cost if you don't.
Does the fee pay for itself?
Almost always, if you keep the loan. A few hundred dollars is typically recovered within a month or two of reduced payments, so the fee rarely decides whether to recast. The decision hinges on the payment-vs-interest trade-off above, not the administrative charge. To see your own break-even in months, run your numbers through the recast calculator.
Does a bigger lump sum cost more?
No — and this trips people up. The recast fee is a flat administrative charge, not a percentage of the money you put down. Whether you apply $10,000 or $150,000, the fee is the same few hundred dollars. That's the opposite of a refinance, where costs scale with the loan amount. So a large lump sum actually improves the economics of recasting: the fixed fee is spread against a much bigger payment reduction, and the break-even arrives almost immediately.
Why the minimum exists
The minimum principal requirement — commonly $5,000 to $10,000 — isn't arbitrary. Re-amortizing a loan costs the servicer staff time, so they set a floor below which a recast isn't worth processing for either side. A tiny curtailment would barely move your payment anyway. If your lump sum is well above the minimum, this rule never comes into play; if it's close, ask whether a slightly larger payment unlocks the recast.
Recast cost vs refinance cost, in real terms
The gap is stark. A refinance on a $300,000 loan at 3% closing costs runs roughly $9,000; at 5% it's $15,000 — before you factor in a potentially higher interest rate. A recast on the same loan is a single fee, often around $250, with your existing rate untouched. Unless a refinance meaningfully lowers your rate, the recast is dramatically cheaper for achieving a lower monthly payment.
The one cost worth pausing on
Beyond dollars, remember the opportunity cost of the lump sum itself. Money committed to the mortgage isn't available for an emergency fund, high-interest debt, or an investment that might out-earn your mortgage rate. That's not a fee, but it's the most important number in the decision — and it's why the fee itself rarely changes the answer.
Cost to recast — FAQ
How much does it cost to recast a mortgage?
Most servicers charge a one-time fee of roughly $150 to $500 (around $250 is common). There are no closing costs, appraisal, or credit-check fees like a refinance.
Is there a minimum payment to recast?
Usually yes — commonly $5,000 to $10,000 in principal, though some lenders set it as a percentage of the balance. Confirm your servicer's figure.
Are there hidden costs?
The main 'cost' isn't a fee — it's tying up a large lump sum and saving less interest than you would by keeping your original payment. Watch for that trade-off, not surprise charges.
Does recasting have closing costs like refinancing?
No. That's the appeal — refinancing runs 2%–6% of the loan in closing costs, while a recast is a flat administrative fee.
Is the recast fee worth paying?
If you'll keep the loan a while, the fee is usually recovered within a month or two of lower payments, so it rarely decides the question.