PAYMENT OPTIONS

Mortgage recast explained

A mortgage recast typically follows a sizable principal payment. The lender recalculates the required monthly payment over the remaining term, while the interest rate and payoff date usually stay the same.

Recast versus shortening the term

A recast may lower the required payment. Making the same old payment after a recast can still accelerate payoff, but the result depends on the lender’s rules. A direct principal payment without a recast may instead preserve the payment and shorten the term.

Not every loan qualifies

Eligibility, minimum lump sums, fees and timing vary by servicer and loan type. Ask your lender for written details before planning around a recast.