Mortgage Recast Calculator
Calculate potential savings from making a lump sum payment to reduce your mortgage balance. Our calculator shows new monthly payments, total interest savings, break-even analysis, and mortgage optimization strategies to help you make informed financial decisions.
Last updated: December 15, 2024
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Quick Example Result
For a typical scenario ($300K balance, $50K lump sum, 4.5% rate, 25 years remaining):
$33,125 net savings over loan term
How This Calculator Works
Our mortgage recast calculator uses standard amortization formulas to determine how a lump sum payment affects your mortgage. The calculation considers your current balance, interest rate, remaining term, and lender fees to provide accurate mortgage savings projections and help you evaluate this financial strategy.
The Formula
PMT = P × [r(1+r)ⁿ] / [(1+r)ⁿ - 1]Where P = principal balance, r = monthly interest rate, n = number of payments. The calculator compares payments before and after the lump sum payment to determine savings.
Shows before/after payment comparison and interest savings timeline
Financial Analysis Components
The calculator performs comprehensive analysis including payment reduction calculations, total interest savings over the remaining loan term, recast fee impact, and break-even analysis to determine how long it takes for monthly savings to offset the recast fee.
- Calculates new monthly payment based on reduced principal balance
- Determines total interest savings over remaining loan term
- Accounts for lender recast fees (typically $150-$500)
- Provides break-even analysis showing payback period
- Supports both monthly and biweekly payment frequencies
Industry Standards & References
- Consumer Financial Protection Bureau (CFPB) - Guidance on mortgage recasting and consumer protectionsOfficial information on mortgage modification options
- Fannie Mae & Freddie Mac - Conventional loan recasting guidelines and requirementsGovernment-sponsored enterprise policies for loan modifications
- Mortgage Bankers Association (MBA) - Industry best practices and recasting proceduresProfessional standards for mortgage servicing and modifications
Exploring other mortgage options? Check out our refinance calculator and extra payment calculator.
Get Custom Calculator for Your BusinessExample Calculation
Loan Details:
- Current Balance: $300,000
- Interest Rate: 4.5%
- Remaining Term: 25 years
- Lump Sum Payment: $50,000
- Recast Fee: $250
Results:
- Original Payment: $1,665/month
- New Payment: $1,388/month
- Monthly Savings: $277/month
- Interest Saved: $83,100
- Net Savings: $82,850
- Break-Even: 0.9 months
Result: Save $277 monthly and $82,850 over the loan term with immediate break-even
This demonstrates how recasting can significantly reduce both monthly payments and total interest costs.
Frequently Asked Questions
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