Recast vs Refinance Calculator

Recast if you have a lump sum and your current rate is lower than the rate lenders offer you today. Refinance if a new rate cuts your payment enough to repay the closing costs before you sell or move.

Below is a worked example with both options on the same loan. To run your own recast numbers, use the free mortgage recast calculator.

What a recast and a refinance each do

A recast keeps your loan. You pay a lump sum toward the principal, and the lender recalculates your payment on the smaller balance. PNC says your rate and end date stay the same.

A refinance replaces your loan with a new one. PNC says the new mortgage has a new rate and a new end date. It also has closing costs, which PNC says are often estimated at 2% to 5% of the loan.

RecastRefinance
LoanSame loanNew loan
Interest rateStays the sameSet again at today's rate
Lump sumNeededNot needed
CostLender fee, from none to $250 at the lenders we checkedClosing costs, often 2% to 5% of the loan
Credit checkChase: noneNew application
FHA, VA, USDA loansNot eligible (Chase, PNC)Ask a lender

Lender fees and minimums differ. We list what four lenders publish in our recast rules by lender guide.

Worked example: the same loan, three paths

You owe $300,000 at 4.5% with 25 years left. Your payment for principal and interest is $1,667.50. You have $50,000 to put toward the loan. Our recast calculator opens with these same numbers.

PathPaymentInterest, 25 yearsUpfront cost
Recast, keep 4.5%$1,389.58$166,874$250 fee (assumed)
Refinance at 6.5%$1,688.02$256,405$7,500 closing
Refinance at 3.5%$1,251.56$125,468$7,500 closing

In all three paths the $50,000 goes to the loan, so the balance is $250,000. Both refinance rows use 25 years and closing costs of 3% of $250,000, paid in cash. The 3% is our assumption inside the 2% to 5% range PNC gives. The two refinance rates are made-up examples, not today's quotes. Escrow, taxes and mortgage insurance are left out.

What the numbers show

  • If lenders offer you 6.5% and you hold 4.5%, the refinance payment is higher than the recast payment by $298 a month. Recast wins.
  • If lenders offer you 3.5%, the refinance payment is $138 a month lower than the recast payment. The $7,500 in closing costs are repaid in about 54 months, a little over 4 years. Refinance wins only if you keep the loan longer than that.
  • A third path is to skip both and keep paying $1,667.50 after the $50,000 payment. The loan then ends 6 years and 7 months early, 18 years and 5 months from now. Interest is about $118,000. Chase says a recast can reduce or eliminate the interest you would save this way. Wells Fargo warns that its jumbo loan recast can mean more interest over the full term. You trade that saving for a lower payment.

How to decide: the break-even rule

  1. Get a real refinance quote for the same balance and term. Write down the closing costs and the new payment.
  2. Find your monthly saving: recast payment minus refinance payment.
  3. Divide the closing costs by the monthly saving. The answer is the number of months to break even. In the example: $7,500 / $138 = about 54 months.
  4. If you expect to keep the loan longer than that, refinance can win. If not, or if the new rate is higher than yours, recast.
  5. Check that your loan can be recast. Chase and PNC say FHA, VA and USDA loans cannot.

The monthly payment formula is the standard loan formula, shown on how to calculate a recast payment.

When each option makes sense

Recast fits when

  • You have a lump sum, for example from selling a home.
  • Your rate is lower than the rates you can get now.
  • You want a lower required payment and do not want a new loan or credit check.

Refinance fits when

  • You can get a lower rate and plan to keep the loan past the break-even point.
  • You have no lump sum, or you have an FHA, VA or USDA loan, which Chase and PNC say cannot be recast.

Experian notes that a recast can take more cash up front than a refinance, because of the lump sum it needs, even though the fee is small.

Frequently asked questions

Is a recast better than a refinance?

It depends on your rate and your cash. A recast keeps your current rate and end date and costs a small fee. A refinance can lower your rate, but it costs closing costs and starts a new loan. The break-even rule above shows which one pays off for your numbers.

How much does a refinance cost compared with a recast?

PNC says refinance closing costs are often estimated at 2% to 5% of the loan amount. NerdWallet says usually 2% to 6%. A recast fee is set by your lender: Bank of America states no fee, Wells Fargo states no transaction fee for its jumbo loan recast, and U.S. Bank lists $250. See the lender guide for the details.

Does a recast need a credit check or an appraisal?

Chase says its recast needs no credit check, no appraisal and no income papers. Your loan must be in good standing. Other lenders set their own rules, so ask your servicer.

Which loans cannot be recast?

Chase and PNC both say FHA, VA and USDA loans are not eligible for a recast. If you have one of these, ask a lender about a refinance.

Does a recast change my interest rate or payoff date?

No. PNC says a recast keeps your current interest rate and end date. Only the monthly payment changes. Your escrow amount for taxes and insurance can still change.

What if I pay extra principal but do not recast?

PNC says extra payments do not trigger a new payment schedule. Your required payment stays the same and you pay the loan off sooner. In the example above, that path ends the loan 6 years and 7 months early.

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