Recast vs Refinance
Both lower the payment. A recast keeps your loan and your rate, and a refinance replaces both. Which costs less depends mostly on how your current rate compares with today's.
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Educational estimates only. Not financial, tax, or lending advice.
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Which one lowers your payment for less?
If your current rate is below what lenders are offering, a recast is usually the cheaper way to a lower payment. It applies a lump sum to principal and re-amortizes the smaller balance over the time already left, at the rate you already have. There is no new loan, appraisal or closing costs, only a servicer fee, commonly in the low hundreds.
If your current rate is at or above today’s, a refinance can lower the payment without a lump sum at all, and can cut total interest as well. It costs 2% to 5% of the loan in closing costs and restarts the amortization schedule, which is what the break-even figures below are measuring.
You can do both. A refinance changes the price of the debt and a recast changes its size, and only the recast needs cash you may not have.
Over your 26-year stay
Read the cash column beside the savings. A recast that wins on total cost is not open to you without the lump sum, and a refinance that wins is not open to you if the closing costs have to be paid in cash you do not have.
- Keep current
- Monthly payment
- $2,767
- Net cost over your stay
- $687,691
- vs keeping your mortgage
- —
- Break-even, ours
- —
- Break-even, conventional
- —
- Rate & term refi
- Monthly payment
- $2,591
- Net cost over your stay
- $632,764
- vs keeping your mortgage
- +$54,927
- Break-even, ours
- Month 31
- Break-even, conventional
- Nothing upfront to recover
- Recast
- Monthly payment
- $2,422
- Net cost over your stay
- $630,490
- vs keeping your mortgage
- +$57,201
- Break-even, ours
- Ahead from month 1
- Break-even, conventional
- 12 years 2 months
Why two break-even figures? The conventional figure counts only the monthly payment saving against the cash you pay upfront. Ours also counts what you still owe when you sell, which is why the two disagree.
Compared over
the 26 years you expect to stay
Two break-even figures. The conventional figure counts only the monthly payment saving against the cash you pay upfront. Ours also counts what you still owe when you sell, which is why the two disagree.
| Leave it alone | Replace your mortgage | Change your current loan | |
|---|---|---|---|
| Measure | Keep current | Rate & term refi | Recast |
| Interest rateThe rate on the new or largest loan in this scenario. | 6.875% | 5.75% | 6.875% |
| Starting loan balance | $320,000 | $328,000 | $270,000Low |
| Starting LTV (loan-to-value) | 71.1% | 72.9% | 60.0% |
| Principal & interest | $2,204 | $2,028 | $1,860Low |
| Extra principalVoluntary principal on top of the scheduled payment. Part of what you pay each month, so it belongs in the all-in figure. | — | — | — |
| PMI | — | — | — |
| Property tax + insuranceIdentical across every scenario for the same home, but a real part of the monthly bill. | $563 | $563 | $563 |
| Monthly HOA dues | — | — | — |
| All-in monthly payment | $2,767 | $2,591 | $2,423Low |
| Total closing costs | NoneLow | $8,000 | $250 |
| Cash you have to put inClosing costs paid in cash, plus any lump sum or one-time payment this option needs upfront. | NoneLow | NoneLow | $50,250 |
| Monthly commitment on topMoney you have to keep finding every month beyond the required payment: voluntary extra principal, or the same money invested instead. The required payment itself is the all-in figure above. | NoneLow | NoneLow | NoneLow |
| Cash received | None | None | None |
| Interest over 26 years | $367,691 | $304,764Low | $310,240 |
| Balance left after 26 yearsWhat you would still owe when you expect to sell or refinance again. | $0Low | $0Low | $0Low |
| Equity after 26 yearsHome value less the balance owed. Uses your assumed appreciation rate, which is 0% unless you change it. It is never used to remove mortgage insurance early. | $450,000Low | $450,000Low | $450,000Low |
| Invested balance after 26 yearsOnly the growth on this account is credited against net cost. The contributions are money you paid in, so counting the whole balance would count them twice. | — | — | — |
| Net cost over your planned stayCash closing costs + payments made + balance still owed − cash received. Excludes property tax, insurance and HOA, which are identical across scenarios. | $687,691 | $632,764 | $630,490Low |
| Savings vs keeping your mortgageThis is not the same as interest saved: it also counts the balance you still owe at the end of your stay and any cash you paid upfront. The row above reconciles the two. | Baseline | +$54,927 | +$57,201Low |
| Why that differs from interest saved | — | $62,927 less interest, less $8,000 of extra balance you start out owing — leaving you $54,927 better off. | $57,451 less interest, plus $50,000 of balance you no longer owe, less $50,250 paid in cash at closing — leaving you $57,201 better off. |
| Break-even point, ours“Ahead from month 1” means there was no upfront cost to recover. “Never recovers” means the costs are never paid back. | — | Month 31 | Ahead from month 1 |
| Break-even point, conventionalUpfront cash divided by the monthly payment saving. This is the number most people mean by break-even, and it flatters a refinance: it ignores the principal you stop paying down when the term restarts. The equity-adjusted figure above is the one to rank on. | — | Nothing upfront to recover | 12 years 2 months |
| Time to payoff | 26 yearsLow | 26 yearsLow | 26 yearsLow |
| Total interest, full term | $367,691 | $304,764Low | $310,240 |
| Lifetime cost (interest + costs) | $367,691 | $312,764 | $310,490Low |
How to read this: “Low” marks the lowest figure among the scenarios shown and is not a recommendation. Net cost counts payments made plus the balance still owed at the end of your stay, minus cash received, which is what makes loans of different sizes and terms comparable.
Full amortization schedule
Every payment, month by month: how much goes to interest, how much retires principal, and what you still owe afterwards. The last money column is the all-in cost (principal, interest, any extra you send, mortgage insurance, property tax, homeowners insurance and HOA dues), which is what leaves your account. Switch to the annual view for a year-by-year summary. Printing and the CSV both follow whichever view you are in, so a year-by-year download gives a year-by-year file, which opens in Excel, Google Sheets and Numbers.
| Month | Payment date | Beginning balance | Payment | Principal | Interest | Extra principal | Ending balance | Cumulative interest | Mortgage insurance | Taxes & insurance | HOA | Total monthly cost | LTV |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Jan 01, 2026 | $320,000.00 | $2,204.15 | $370.82 | $1,833.33 | — | $319,629.18 | $1,833.33 | — | $562.50 | — | $2,766.65 | 71.0% |
| 2 | Feb 01, 2026 | $319,629.18 | $2,204.15 | $372.94 | $1,831.21 | — | $319,256.24 | $3,664.54 | — | $562.50 | — | $2,766.65 | 71.0% |
| 3 | Mar 01, 2026 | $319,256.24 | $2,204.15 | $375.08 | $1,829.07 | — | $318,881.16 | $5,493.61 | — | $562.50 | — | $2,766.65 | 70.9% |
| 4 | Apr 01, 2026 | $318,881.16 | $2,204.15 | $377.23 | $1,826.92 | — | $318,503.93 | $7,320.53 | — | $562.50 | — | $2,766.65 | 70.8% |
| 5 | May 01, 2026 | $318,503.93 | $2,204.15 | $379.39 | $1,824.76 | — | $318,124.54 | $9,145.29 | — | $562.50 | — | $2,766.65 | 70.7% |
| 6 | Jun 01, 2026 | $318,124.54 | $2,204.15 | $381.56 | $1,822.59 | — | $317,742.98 | $10,967.88 | — | $562.50 | — | $2,766.65 | 70.6% |
| 7 | Jul 01, 2026 | $317,742.98 | $2,204.15 | $383.75 | $1,820.40 | — | $317,359.23 | $12,788.28 | — | $562.50 | — | $2,766.65 | 70.5% |
| 8 | Aug 01, 2026 | $317,359.23 | $2,204.15 | $385.95 | $1,818.20 | — | $316,973.28 | $14,606.48 | — | $562.50 | — | $2,766.65 | 70.4% |
| 9 | Sep 01, 2026 | $316,973.28 | $2,204.15 | $388.16 | $1,815.99 | — | $316,585.12 | $16,422.47 | — | $562.50 | — | $2,766.65 | 70.3% |
| 10 | Oct 01, 2026 | $316,585.12 | $2,204.15 | $390.38 | $1,813.77 | — | $316,194.74 | $18,236.24 | — | $562.50 | — | $2,766.65 | 70.3% |
| 11 | Nov 01, 2026 | $316,194.74 | $2,204.15 | $392.62 | $1,811.53 | — | $315,802.12 | $20,047.77 | — | $562.50 | — | $2,766.65 | 70.2% |
| 12 | Dec 01, 2026 | $315,802.12 | $2,204.15 | $394.87 | $1,809.28 | — | $315,407.25 | $21,857.05 | — | $562.50 | — | $2,766.65 | 70.1% |
Showing 1–12 of 312 payments
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Educational estimates only. Not financial, tax, or lending advice. Want every option side by side instead? Open the full comparison.
What does each one change?
They move different parts of the loan, which is why they can be compared at all.
| Recast | Rate-and-term refinance | |
|---|---|---|
| Interest rate | Unchanged | Whatever you are offered today |
| Payoff date | Unchanged | Reset to the new term |
| Balance | Falls by the lump sum | Unchanged, or higher if costs are financed |
| Required payment | Falls | Falls, rises or holds, depending on rate and term |
| Cash needed | The lump sum, plus a fee | Closing costs, unless financed |
| Underwriting | None in most cases | Full application, credit and appraisal |
| Availability | Servicer's discretion; often excluded on FHA and VA | Any qualifying borrower |
Structural differences only. Minimum lump sums, fees and eligibility are set by your servicer; rates and closing costs by the lender. Confirm both before planning around either.
Why does the refinance side show a later break-even?
Because a new 30-year term restarts the interest-heavy years you have already paid through.
A recast keeps your place in the amortization schedule. A refinance sends you back to month one of a new one, where almost every dollar is interest. A lower rate over a longer term can still mean more total interest, and the comparison above charges each option for the balance it leaves owing so the two can be compared fairly.
There is a way to have both: refinance into a term matching the years you have left rather than a fresh thirty. The guide to term resets covers what that costs and what it saves.
What if you do not have a lump sum?
Then a recast is not an option, and the choice narrows to two.
A recast needs money in hand, usually above a minimum the servicer sets. Without it, the real choice is between refinancing and extra principal payments, which need no cash upfront but leave the required payment where it is.
That comparison is on its own page: recast vs extra payments. Say what cash you have in the eligibility block above and any option out of reach is marked, with the reason, rather than costed as if you could take it.