Top US Lenders' Mortgage Recast Rules, Fees, and Requirements Explained
Recasting is a servicing decision, which means the person who owns your loan sets the rules — not some universal standard. Minimums, fees, and eligibility differ from one lender to the next, and they revise them without fanfare. This guide maps the common ground and hands you a checklist so you confirm the specifics that actually apply to your loan.
What nearly every lender requires
Before the lender-by-lender detail, four rules hold almost everywhere:
- A minimum principal reduction. Usually somewhere between $5,000 and $10,000, sometimes expressed as a percentage of the balance.
- An eligible loan type. Most conventional fixed-rate loans qualify. FHA, VA and USDA loans generally do not. Jumbo and investment loans are case-by-case.
- A clean payment history. Many servicers want the loan current, often with a stretch of on-time payments.
- A modest fee. Typically a flat charge, frequently a few hundred dollars or less.
Recast policy at a glance
Use this as a starting map, then confirm your row with the lender.
| Lender | Recast offered? | Typical minimum | Typical fee | Notes |
|---|---|---|---|---|
| Chase | Commonly yes | ~$5,000 | Small flat fee | Conventional loans; re-amortizes at your existing rate. See our Chase tool. |
| Wells Fargo | Commonly yes | ~$5,000 | Small flat fee | Conventional, on eligible loans; confirm current terms. |
| Bank of America | Often case-by-case | Varies | Varies | Confirm eligibility for your specific loan. |
| Rocket Mortgage | On some loans | Varies | Varies | Availability depends on loan type and investor. |
| PennyMac | On eligible loans | Varies | Small flat fee | Confirm loan-type eligibility. |
| Freedom Mortgage | On eligible loans | Varies | Varies | Government-backed loans usually excluded. |
| Movement Mortgage | On eligible loans | Varies | Varies | Ask about investor overlays. |
| Truist (formerly SunTrust) | On eligible loans | Varies | Varies | SunTrust merged into Truist; policies now under Truist servicing. |
Last reviewed: set on verification. Figures are commonly-observed ranges, not lender quotes.
Loan types that usually can't be recast
Government-backed programs typically prohibit recasting because of how they're structured and insured:
- FHA loans — generally not eligible; borrowers use extra principal payments or a streamline refinance instead.
- VA loans — generally not eligible for recasting.
- USDA loans — generally not eligible.
If you hold one of these, paying extra toward principal still shortens your loan and cuts interest — it just won't lower the required monthly payment the way a recast would. Our calculator shows that "pay down, keep paying" path in the comparison table.
Two related questions come up constantly: which loan types can be recast, and how much recasting costs.
Lender-specific estimators: Chase, Wells Fargo, Bank of America, Rocket, PennyMac, Mr. Cooper, Truist, and U.S. Bank.
Why these policies keep moving
Recast terms aren't set in stone anywhere. A servicer can raise a minimum, add or drop a fee, or stop offering recasts on a loan category when the investor behind the loan changes its rules — often with no announcement. Loans also get sold, which means the company you send payments to today may not be the one that originated your mortgage, and the new servicer's policy is the one that applies. That churn is exactly why we date this guide and lean on primary sources: a recast minimum that was accurate last year can quietly be wrong this year. Treat every figure here as a starting point to confirm, not a commitment.
The questions to ask your servicer
Copy these into your call or secure message. Getting clear answers up front prevents a lump sum from landing in the wrong place.
- Is my specific loan eligible to be recast?
- What is the current minimum principal reduction?
- What is the exact fee, and is it paid upfront or added to the balance?
- Do I make the principal payment first, or submit the request first?
- How should I designate the payment so it applies to principal only?
- Which statement will show my new payment, and by what date?
- How many times can I recast, and is there a waiting period?
Estimate before you call
Walk into the conversation knowing your new payment and interest saved. The calculator flags lender minimums and fee break-even automatically.
Common questions
Do all lenders offer recasting?
No. Recasting is optional for servicers, and availability depends on your loan type and who owns the loan. Many large conventional servicers offer it; government-backed loans generally can't be recast.
Why do recast minimums differ so much?
Each servicer sets its own threshold, and investor guidelines behind the loan can impose their own overlays. That's why a $5,000 payment might qualify at one lender and fall short at another.
Is the recast fee negotiable?
Sometimes. It's a small flat fee at most lenders, so there's limited room, but it never hurts to ask — especially against the cost of a full refinance.
My loan was sold. Whose rules apply?
The current servicer's. If your loan changed hands, confirm recast eligibility with whoever you now send payments to, not the original lender.
Guies Roc Blanc is an independent publisher and is not affiliated with, endorsed by, or sponsored by any lender named here. Policies and fees change; this guide is general education, not advice. Verify all terms directly with your servicer.