Mortgage Recast Payment Reduction Calculator
Payment breakdown
Interest & break-even
Solve it backwards: aim for a payment
Know how much lower you want the bill? See the principal it takes to get there.
Total monthly housing cost
Where your money goes over time
If the freed-up cash is invested at 7%, the saved payments grow to about $0 by payoff.
Four ways to use that cash
| Scenario | Monthly P&I | Interest left | Payoff | What happens |
|---|
Show the full amortization schedule (before vs after)
| # | Int. now | Prin. now | Bal. now | Int. recast | Prin. recast | Bal. recast |
|---|
How to use this calculator
- Enter your current loan balance, interest rate, and remaining term.
- Enter the lump-sum amount you plan to pay toward principal.
- Click Calculate to see your new payment, interest savings, and comparison.
About this tool
Most calculators ask how much you'll pay and tell you the new payment. This one runs the other direction: tell it how much lower you want the payment, and it solves for the exact principal a recast needs. Set your target, then apply it to the full model in one click.
From a target payment to the principal it takes
The relationship between a lump sum and the payment drop is perfectly linear for a given rate and remaining term, which makes the reverse calculation clean. Every dollar you apply to principal lowers your payment by a fixed amount — the "payment per dollar" of your loan. Divide the reduction you want by that figure and you have the principal required.
where payment-per-dollar = r(1 + r)ⁿ ÷ [ (1 + r)ⁿ − 1 ]
r = annual rate ÷ 12 · n = payments remaining
The solver above does this instantly and caps the answer at your balance — because you can't cut your payment by more than the payment itself. Once you see the number, hit "use this amount" and the whole model — interest saved, break-even, amortization, and the invest-instead comparison — recalculates around your target.
Set a realistic target
A common mistake is anchoring on a payment cut that would swallow most of your savings. Before committing a large sum to home equity — which is far harder to tap than cash — check the "principal needed as a percent of balance" note the solver shows. If hitting your target means draining your reserves, a smaller reduction or a different strategy may serve you better. The four-scenario table helps here: sometimes keeping the cash invested beats forcing a specific payment.
Not sure a recast is the right lever?
Compare recasting against refinancing and paying down on the same numbers.
Reverse solver questions
How much principal do I need to lower my payment by $500?
It depends on your rate and remaining term, but the relationship is linear: divide $500 by your loan's payment-per-dollar. Enter $500 as your target above and the solver returns the exact amount for your loan.
Can I cut my payment by any amount I want?
Only up to your current payment — you can't reduce it below zero. The solver caps the required principal at your balance and warns you if a target is out of reach.
Does a bigger payment cut always save more money?
Not necessarily. A lower payment improves cash flow, but keeping the old payment on a reduced balance can save more interest. Weigh both, plus the value of investing the cash.
Will this match my lender's number?
It should be very close. Small differences come from rounding, the recast fee, and the exact posting date. Confirm the official figure with your servicer.