How to Calculate a Mortgage Recast Payment

Subtract your lump sum from your balance. Then use the standard loan payment formula on the new balance, with the same rate and the months you have left. On a $300,000 loan at 4.5% with 25 years left, a $50,000 lump sum cuts the payment from $1,667.50 to $1,389.58.

The steps are below. To skip the math, use the free calculator on this page or the mortgage recast calculator.

The recast payment formula

A recast does not change your rate or your end date. Chase says the remaining balance is spread over the remaining term at your current rate. Fannie Mae describes the same idea: the payment is recalculated over the remaining term, based on the new outstanding balance.

Payment = P x i x (1 + i)^n / ((1 + i)^n - 1)

  • P is the balance after your lump sum.
  • i is the monthly rate: the yearly rate divided by 12, written as a decimal.
  • n is the number of monthly payments left.

This is the standard annuity formula that amortization calculators use. It works when the rate is above zero.

Step-by-step example

You owe $300,000 at 4.5%, with 25 years left. You pay $50,000 toward the principal.

  1. New balance: $300,000 - $50,000 = $250,000.
  2. Monthly rate: 4.5% / 12 = 0.375%, or 0.00375.
  3. Months left: 25 x 12 = 300.
  4. Growth factor: (1.00375)^300 = 3.07374.
  5. Payment: $250,000 x 0.00375 x 3.07374 / (3.07374 - 1) = $250,000 x 0.0055583 = $1,389.58.

Run step 5 again with the old $300,000 balance and you get $1,667.50. The recast saves $277.92 a month on principal and interest.

Before recastAfter recast
Balance$300,000$250,000
Rate4.5%4.5%
Months left300300
Monthly payment (P&I)$1,667.50$1,389.58
Interest if you pay all 300 months$200,249$166,874

These figures leave out escrow and the recast fee. Fees differ by lender, so see recast fees and rules by lender.

Check it with your own numbers

The calculator below opens with the example above. Change the balance, rate, years left and lump sum to match your loan.

$
%
years
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Spreadsheet shortcut

Spreadsheets have a payment function. Microsoft documents it as PMT(rate, nper, pv). For our example, type:

=PMT(4.5%/12, 25*12, 250000)

Microsoft says to keep the units the same: a yearly rate divided by 12 goes with the number of months. The result shows in parentheses, as a negative number. The size of the number, 1,389.58, is your payment.

Why your lender's number can differ

  • Escrow. A recast changes only the principal and interest part. Chase and Bank of America say the escrow part for taxes and insurance can still change.
  • Months left. Use the months your servicer shows, not the original term.
  • Rate. Wells Fargo says it uses your then-current rate. If your rate is not fixed, use the rate you have on the recast date.
  • No quote ahead of time. Bank of America says it cannot estimate the new payment before the recast is done. Bank of America says the agreement you sign shows the new principal and interest payment.

Before you commit money, compare the recast with a refinance in our recast vs refinance guide.

Frequently asked questions

What is the formula for a recast payment?

Payment = P x i x (1+i)^n / ((1+i)^n - 1). P is the balance after your lump sum, i is the yearly rate divided by 12, and n is the number of months left. It is the standard loan payment formula, applied to the smaller balance.

What does reamortize mean?

To reamortize is to build a new payment schedule for the balance you still owe. Fannie Mae names this a re-amortized (recast) mortgage: the payment is recalculated over the remaining loan term based on the new outstanding balance.

Does a recast change my rate or loan term?

Chase says a recast keeps your current interest rate and spreads the remaining balance over the remaining term. Bank of America's recast FAQ says the interest rate and repayment schedule stay the same. Only the payment goes down.

Why is my lender's new payment different from my estimate?

Common causes are a different number of months left, a rate typed in the wrong form, or escrow. Chase and Bank of America both say the escrow part of your payment can change after a recast. Bank of America also says it cannot give an estimate before the recast is done. Bank of America says the agreement you sign shows the new principal and interest payment.

Is the recast fee part of the lump sum?

In this math, no. Only money applied to principal lowers the balance. Pay the fee on top and add it to your cost when you compare options.

How many months are left on my loan?

Count the monthly payments from your next one to your last one. For whole years, multiply the years by 12. For example, 25 years left is 300 payments.

Sources

Every figure on this page comes from the pages below. Checked 2026-10-15. Rules change, so confirm with your own servicer.

More recast guides