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Recast vs Refinance Calculator

Compare recasting your mortgage vs refinancing when you have a lump sum to apply.

Last updated October 18, 2026

How our math works

Assumptions
  • Refinance option: 6% fixed for 30 years; current loan: 6.5% with 27 years remaining
  • Recast fee $250 and closing costs $6,000 as entered
  • Rates shown are interest rates used for estimation only — not APRs and not offers. APR reflects fees and other loan costs and may differ from the interest rate shown.
My scenario

Enter income, debts, price, and rate once. Every calculator pre-fills.

Current Mortgage

$

%

years

Lump Sum

$

Amount to apply to principal

$

Refinance Option

%

$

Comparison Assumptions

%

Annual return if you invest the cash flow a lower payment frees up

Best Option Over 27 Years

Prepay Only

Lowest net cost: $472,781 over 27 years

Current Payment
$2,098
Recast Payment
$1,770
Fee: $250
Refi Payment
$1,619
Costs: $6,000
Prepay Saves
9 years
Options Compared

Three ways to use your lump sum, all measured over the same 27-year horizon

Recast

Monthly Payment

$1,770

Interest (27 yr)

$303,479

Still Owed at Yr 27

$0

Net Cost

$539,222
Refinance

Monthly Payment

$1,619

Interest (27 yr)

$307,698

Still Owed at Yr 27

$53,211

Net Cost

$510,206
Prepay Only
LOWEST NET COST

Monthly Payment

$2,098

Interest (27 yr)

$193,889

Still Owed at Yr 27

$0

Net Cost

$472,781
Net Cost Over 27 Years

Payments + fees + balance still owed − earnings on invested cash-flow savings. Lower is better.

Recast

$539,222

Refinance

$510,206

Prepay Only

$472,781

Quick Comparison

Key differences at a glance

Recast

✓ Low fee ($250)
✓ Keep current rate
✓ Lower payment
✓ Quick process

Refinance

✓ New rate (6%)
✓ Reset term
✓ Higher costs ($6,000)
✓ More paperwork

Prepay Only

✓ No fees
✓ Same payment
✓ Pay off 9 years early
✓ No cash flow freed

Insights
Analysis

All options are compared over the same 27-year horizon (your current loan's remaining term). Net cost = upfront costs + mortgage payments made + balance still owed at year 27 − investment earnings on freed-up cash flow (invested monthly at 4%).

Analysis

Recast: pay a $250 fee to lower your payment to $1,770/month, freeing $328/month. Invested, that cash flow grows to $190,707 by year 27.

Analysis

Refinance: $6,000 in closing costs for a $1,619/month payment at 6%. Because the new 30-year term extends past the 27-year horizon, you'd still owe $53,211 at year 27 — that balance is counted in its net cost.

Analysis

Prepay only: keep paying $2,098/month and pay the loan off about 9 years early, then invest the full payment afterward.

Analysis

Best overall: Prepay Only, with the lowest 27-year net cost of $472,781 — $37,425 less than Refinance ($510,206).

Analysis

Prepay Only has the lowest net cost: paying the loan down at 6.5% beats investing freed-up cash at 4%, with no fees or closing costs.

The Bottom Line

With $50,000 to apply, Prepay Only has the lowest net cost over the next 27 years ($472,781, counting fees, any balance still owed at year 27, and earnings on freed-up cash flow invested at 4%).

Here are the exact formulas behind your numbers. No black boxes — just math.

Recast vs Refinance

Common Horizon

27 years
Current loan remaining termEvery option is measured over the same number of years so a longer refinance term is counted via its remaining balance, not ignored.

Recast Payment

$1,770
(Balance − Lump Sum) × r × (1+r)ⁿ ÷ [(1+r)ⁿ − 1]New payment after applying lump sum at your existing rate and remaining term.

Refinance Payment

$1,619
(Balance − Lump Sum) × r_new × (1+r_new)ⁿ ÷ [(1+r_new)ⁿ − 1]New payment at the new rate and term after the lump sum is applied to the balance.

Recast Fee

$250
Typically $150–$500One-time fee charged by your servicer to recast.

Refinance Closing Costs

$6,000
2–5% of loan amountAppraisal, origination, title, and other fees.

Still Owed at Horizon

$0 recast / $53,211 refi / $0 prepay
Amortization balance after horizon monthsA refinance that outlives the horizon still owes this balance; recast and prepay typically reach $0.

Freed Cash Flow (invested)

$190,707 recast / $278,685 refi / $256,899 prepay
Σ (Current Payment − Option Payment) compounded monthly at the savings rateCredit for cash a lower payment frees up. After an early payoff, the full payment is invested until the horizon.

Net Cost at Horizon

$539,222 recast / $510,206 refi / $472,781 prepay
Upfront costs + payments made + remaining balance − investment earningsThe ranking metric. Lower is better; the recommendation always uses this number.

Best Option

Prepay Only
Lowest net cost over the common horizonThe option whose net cost is smallest after counting remaining balance and invested cash-flow savings.
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Frequently Asked Questions

A recast applies a lump sum to your principal, then re-amortizes your existing loan over its remaining term at the same rate. Your monthly payment drops, your rate and payoff date stay the same, and the fee is typically only $150-$500 — far less than refinance closing costs.

Recast when you like your current rate and mainly want a lower payment. Refinance when market rates are meaningfully below your rate. Simply prepaying principal (no recast) keeps the same payment but shortens the loan — often the biggest interest saver. This calculator compares all three.

No. A recast keeps your original rate and payoff date — it only lowers the monthly payment by spreading a smaller balance over the same remaining term. If your rate is above market, refinancing may save more despite higher upfront costs.

Methodology & Data Sources

Calculations use standard amortization formulas on the inputs you provide. Where available, the “Show Me the Math” section above walks through the exact formulas behind your result. Default interest rate (30-yr fixed: 6.75%) is based on national averages from the Freddie Mac Primary Mortgage Market Survey (PMMS), week of October 15, 2026. Replace defaults with your actual quote for precise results.Content reviewed by the Dett.io editorial team. Last updated: .
Important: This calculator provides estimates for educational purposes only. Results are not a loan offer, pre-qualification, pre-approval, or commitment to lend. Actual rates, terms, payments, and eligibility are determined by mortgage lenders based on your complete financial profile, credit history, property appraisal, and current market conditions. Dett.io is not a lender, broker, or financial advisor. Consult qualified professionals before making financial decisions. See our Terms of Use for full details.