Reamortize Mortgage Calculator

Reviewed by David Chen, CFA | Mortgage Recast Expert | Last Updated: November 2023

Considering a mortgage recast? Use this reamortize mortgage calculator to see how making a lump sum payment can lower your monthly installments without the need for a full refinance.

Reamortize Mortgage Calculator

$
Please enter a valid loan balance.
%
Please enter a valid interest rate.
Years
Please enter a valid remaining term.
$
Lump sum cannot exceed loan balance.
New Monthly Payment
$0.00
Monthly Savings: $0.00
Rate & Term Remain Unchanged

Reamortize Mortgage Calculator Formula

Reamortization (or recasting) involves recalculating the monthly payment based on a reduced principal balance while maintaining the original interest rate and remaining term.

M_new = (P – Lump Sum) [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

Variables

  • M_new: The new, lower monthly payment.
  • P: Current Principal Balance.
  • Lump Sum: The large payment applied to principal.
  • i: Monthly Interest Rate.
  • n: Remaining Number of Payments (Months).

Related Calculators

What is Reamortize Mortgage Calculator?

A reamortize mortgage calculator helps homeowners who have come into a large sum of money (inheritance, bonus, sale of another property) and want to lower their monthly payments without refinancing.

Unlike a standard “extra payment” which shortens your loan term but keeps your monthly bill the same, reamortization (or recasting) keeps your loan term the same (e.g., you still finish paying in 2040) but lowers your required monthly payment immediately.

How to Calculate Reamortize Mortgage Calculator (Example)

Scenario: You owe $300,000 at 5% with 25 years left.

  1. Current Payment: ~$1,753.77 (P&I).
  2. Lump Sum: You pay $50,000 to recast.
  3. New Balance: $250,000.
  4. New Calculation: Amortize $250k over 25 years at 5%.
  5. New Payment: ~$1,461.48.
  6. Savings: Your monthly obligation drops by $292.29.

Frequently Asked Questions (FAQ)

Does every lender offer recasting?

No. While many major servicers (like Chase, Wells Fargo, or Rocket Mortgage) offer recasting, FHA and VA loans generally do not allow it. Always check with your servicer first.

Is there a fee to reamortize?

Yes. Most lenders charge a small administrative fee to process a recast request, typically ranging from $150 to $500. This is significantly cheaper than closing costs for a full refinance.

Does my interest rate change?

No. A recast only affects the principal balance and monthly payment amount. Your interest rate and the remaining number of months on your loan remain exactly the same.

Why reamortize instead of payoff early?

If your goal is cash flow flexibility, reamortization is better because it lowers your mandatory monthly bill. If your goal is to be debt-free ASAP, simply making the lump sum payment without recasting (and continuing high payments) is faster.

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