How Much Will a Mortgage Recast Lower My Payment?
Your principal and interest payment falls by the same share as your balance. Divide the lump sum by your balance: that is the share your payment drops. A $50,000 lump sum on a $300,000 balance is 1/6, or 16.67%, so a $1,667.50 payment becomes $1,389.58, a drop of $277.92 a month.
The rate and the years left do not change the percentage. They change only the dollar amount you start from. Tables and a calculator are below.
The shortcut: lump sum divided by balance
A recast keeps your rate and your remaining term, and the payment formula scales with the balance. If the balance falls by 10%, the payment falls by 10%. So:
New payment = old payment x (balance - lump sum) / balance
Check it on the example: $1,667.50 x $250,000 / $300,000 = $1,389.58. The same answer comes from the full formula in how to calculate a recast payment.
Lookup table: one loan, four lump sums
The loan: $300,000 balance, 4.5% rate, 25 years left, current payment $1,667.50 (principal and interest).
| Lump sum | Share of balance | New payment | Monthly drop |
|---|---|---|---|
| $10,000 | 3.33% | $1,611.91 | $55.58 |
| $25,000 | 8.33% | $1,528.54 | $138.96 |
| $50,000 | 16.67% | $1,389.58 | $277.92 |
| $100,000 | 33.33% | $1,111.66 | $555.83 |
On this loan every $1,000 of lump sum lowers the payment by $5.56.
A different loan gives the same percentages
The loan: $400,000 balance, 6.5% rate, 28 years left, current payment $2,588.06.
| Lump sum | Share of balance | New payment | Monthly drop |
|---|---|---|---|
| $10,000 | 2.50% | $2,523.36 | $64.70 |
| $25,000 | 6.25% | $2,426.31 | $161.75 |
| $50,000 | 12.50% | $2,264.56 | $323.51 |
| $100,000 | 25.00% | $1,941.05 | $647.02 |
The share of the balance sets the percentage drop. The bigger balance and higher rate make each dollar of lump sum worth more on the bill: $6.47 per $1,000 here, against $5.56 on the first loan.
Try your own balance
The calculator below opens with the $50,000 example. Enter your balance, rate, years left and lump sum to see your own drop.
What the drop does not include
- Escrow. Chase says the escrow part of your payment can still change after a recast.
- Interest cost. A lower payment keeps your end date, so you pay interest for longer than if you kept your old payment. See recast vs extra principal payment.
- Fees and minimums. Both differ by lender. See recast fees and rules by lender.
Frequently asked questions
How much will a $50,000 lump sum lower my payment?
By the share of your balance it covers. On a $300,000 balance, $50,000 is one sixth, so the principal and interest payment falls by one sixth: from $1,667.50 to $1,389.58. On a $400,000 balance the same $50,000 is one eighth, so the payment falls by 12.5%.
Does my interest rate change how much the payment drops?
Not the percentage. The payment is proportional to the balance, so a lump sum of 10% of the balance cuts the payment by 10% at any rate. A higher rate makes the dollar amount larger, because the payment you start from is larger.
Does the number of years left matter?
Not for the percentage either. The recast keeps your remaining term, so the term is the same before and after. It changes only the dollar size of your starting payment.
Will my total monthly bill drop by the same amount?
Only the principal and interest part. Chase says the escrow part of your payment can still change after a recast. Taxes, insurance and mortgage insurance, if you pay them, are not in this math.
Why does my lender's figure differ from the calculator?
Common causes are the months left, the balance at the recast date and escrow. Use the figures on your latest statement, and see how to calculate a recast payment for the steps.
Is a bigger payment drop always better?
No. A bigger lump sum lowers the payment more but ties up more cash in the house. Compare the recast with paying the same money toward principal and keeping your payment before you decide.
Sources
Every figure on this page comes from the pages below. Checked 2026-10-16. Rules change, so confirm with your own servicer.
- Chase: Recast your mortgage loan (the escrow part of the payment can still change)
- Wikipedia: Amortization calculator (the payment formula, which scales with the balance)
More recast guides
- Free Mortgage Recast Calculator - enter your own loan and see the new payment.
- Recast vs Refinance Calculator - Compare both options on the same loan, with a break-even point.
- Recast Fees and Rules by Lender - Fees, minimums and loan limits published by four large lenders.
- How to Calculate a Recast Payment - The formula, a step-by-step example and the numbers to check.
- Recast vs Extra Principal Payment - The same lump sum two ways: payment, payoff date and interest.
- Recast Amortization Schedule - Balance and interest by year, before and after a recast.