Mortgage Recast vs Extra Payments
Payment breakdown
Interest & break-even
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
You have a lump sum and you're putting it on the mortgage either way. The question is whether to recast (lower the required payment, same term) or make an extra principal payment (same payment, shorter term). They lead to very different places — here's how to choose, with the math.
Start with the one-line version: an extra principal payment saves more total interest; a recast lowers your required monthly payment. Same money in, different lever pulled. The reason is the loan term. When you pay extra and keep your original payment, the balance falls and the loan finishes years early — the lender collects interest for fewer months. When you recast, the term stays put and only the payment shrinks, so you save less interest overall.
The same $50,000, two ways
Say you're five years into a 30-year loan with about $373,500 left and 25 years to go. Drop $50,000 on the principal and the picture splits:
| Move | Monthly payment | Payoff | Interest saved |
|---|---|---|---|
| Extra payment (keep paying the same) | Unchanged | ~5–6 yrs sooner | Most |
| Recast (re-amortize the balance) | Lower | Same date | Less |
The calculator above shows this side by side for your real numbers — including the "pay lump, no recast" column, which is exactly the extra-payment scenario.
The hybrid almost nobody mentions
You don't have to pick a side. A quietly powerful play is to recast first, then keep paying the old, higher amount. The recast lowers your required payment (a safety net if money ever gets tight), but by voluntarily paying the original figure you drive the balance down fast and shorten the term anyway. You get the flexibility of the lower obligation and most of the interest savings of extra payments.
Rule of thumb: choose extra payments if the goal is to be debt-free fastest and cheapest; choose a recast if you need a lower required payment; do both if you want a safety net without giving up speed.
Cost and eligibility, briefly
Extra payments are free and available on virtually any loan. A recast usually carries a small fee and isn't offered by every servicer or on every loan type. If your loan can't be recast, the extra-payment route still delivers the bigger interest savings — you simply won't get the lower required payment.
Recast vs extra payments — FAQ
Does recasting save more than extra payments?
Usually no. The same lump sum applied as an extra payment — while you keep paying the original amount — saves more total interest and pays the loan off sooner. Recasting saves less interest but lowers your required payment.
Can I recast and still pay extra afterward?
Yes. Some borrowers recast to lower the required payment for safety, then keep paying the old, higher amount to also shorten the term. You get the lower obligation plus faster payoff.
Do extra payments lower my monthly payment?
No. Extra principal shrinks the balance and shortens the term, but your required monthly payment stays the same unless you ask the servicer to recast.
Which is cheaper to do?
Extra payments are free; recasting usually costs a small fee (often $150–$500). If your only goal is minimum interest, extra payments win on cost too.
When is a recast the better choice?
When you need or want a lower required payment — for cash-flow safety, retirement, or after buying before selling — while keeping your current interest rate.