Mortgage Recast Calculator with Re-amortization Schedule

Mortgage Recast Calculator Sign
This calculator was referenced in the February 8th, 2019 issue of The Wall Street Journal, in an article titled, "To Reduce Payments, Recast Your Mortgage", written by Katy McLaughlin.

It was recently brought to my attention that the Extra Payment Mortgage Calculator did not apply to some borrowers because ... are you ready for this ...

Their mortgage lenders said that making extra payments would not save the borrowers any money or pay off their mortgage any sooner.

What?!

Instead, mortgage lenders sometimes offer to recast the borrower's mortgage, but the borrower needs to make a large principal payment to qualify for the recast.

Now, I don't know the exact wording of the fine print included in the mortgage papers these borrowers have signed, but I can only assume the fine print read something like this:

You can make all the extra payments you want, but it won't reduce the interest cost or the length of the payoff because we (the mortgage lender) secretly sold your mortgage to an investor for a lump sum of money, so we will simply put your extra and overpayments into escrow and then apply them to the loan at the end of the payment term.

If that's true, does it sound like the mortgage lender genuinely cares about their customers?

Not to me, it doesn't.

So the next question you might be asking is, what the heck do lenders mean when they tell borrowers they can recast their mortgage? If so, feel free to visit the Learn section on this page to find out what recasting is and how it works.

Otherwise, this calculator will calculate your recast payment and any interest savings the recasting will generate. Plus, the calculator will also allow you to view and print out the revised amortization schedule.

Read more ...

Also on this page:

Mortgage Recast Calculator

Calculate your mortgage recast payment and compare the interest cost to your original terms.

Learn More

Selected Data Record:

A Data Record is a set of calculator entries that are stored in your web browser's Local Storage. If a Data Record is currently selected in the "Data" tab, this line will list the name you gave to that data record. If no data record is selected, or you have no entries stored for this calculator, the line will display "None".

DataData recordData recordSelected data record: None
BalCurrent balCurrent principal balanceCurrent principal balance:

To calculate the current principal balance, enter the next and final payment month and year OR the number of payments remaining. Next enter the annual interest rate and monthly payment amount, and then click the "Calculate Principal" button.

Next pmt Mo/Yr:
#
Payoff Mo/Yr:
#
Or, payments left:
#
Interest rate:
%
Monthly payment:
$

Number of payments remaining:

Enter the number of monthly payments remaining on your mortgage. Enter a whole number only (no decimal point or fractions).

Current principal balance:

Enter the dollar amount of the current payoff amount of your mortgage (principal owed). Enter without the dollar sign and commas.

If you don't know the current principal balance, you can either call your mortgage lender or expand the description to have the calculator estimate your current principal balance based on the number of payments you have remaining.

$
RateInterest rateAnnual interest rateAnnual interest rate:

Annual interest rate:

Enter the annual percentage rate (APR) you are being charged on your mortgage. Enter as a percentage, but without the percent sign.

%
PI paymentPI paymentPrincipal and interest paymentCurrent monthly principal and interest payment:

Current monthly principal and interest mortgage payment:

Enter your current monthly principal and interest payment (do not include amounts your are paying for taxes and insurance). Enter without the dollar sign and any commas.

$
Next pmt:Next payment:Month and year of next payment:Month and year of next mortgage payment:

Month and year of next mortgage payment:

Select the month and year of your first mortgage payment. If this is an existing mortgage the Mortgage Recast Calculator will assume that a payment has not been made for the current month, so the current month will be used as the start of the amortization schedule.

reductionreductionreduction in principallump sum reduction in principal:

Lump sum reduction in principal:

Enter the lump sum amount that you will be using to pay down your principal balance for the mortgage recasting (not including the recasting fee). Enter without the dollar sign and any commas.

If your mortgage lender offers annual recasting, select "Annual" from the drop down menu. The calculator will then reduce your principal and payment amount each year that your balance is greater than the recast amount. Note that any recast fee you entered will be multiplied by the total number of recasts.

$
Recast feeRecasting feeRecasting feeRecasting fee:

Recasting fee:

Enter the dollar amount of the fee your mortgage lender will be charging you to recast the mortgage. Enter without the dollar sign or any commas.

$
Schedule:Schedule:Include schedule:Include amortization schedule:

Include amortization schedule:

If you would like the results to include an amortization schedule, move the switch to the "Yes" position. Otherwise move the switch to the "No" position.

Pmts left:Payment left:Number of payments remaining:Number of payments remaining:

Number of payments remaining:

Based on your entries, this is the number of mortgage payments you still need to make in order to pay off your mortgage. If this number is substantially different from the actual number, please check to make sure you entered the correct current payoff amount and/or interest rate. Note that this number stays the same for recasting.

Recast bal:Recast balance:Recast loan balance:Recast loan balance:

Recast loan balance:

Based on your entries, this is how much you will still owe (principal balance) on your home loan after deducting the lump sum recasting payment.

Recast ComparisonPaymentInterest
Existing terms:Existing terms:Existing terms:Existing terms:
Recast terms:Recast terms:Recast terms:Recast terms:
Recast savings:Recast savings:Recast savings:Recast savings

If you would like to save the current entries to the secure online database, tap or click on the Data tab, select "New Data Record", give the data record a name, then tap or click the Save button. To save changes to previously saved entries, simply tap the Save button. Please select and "Clear" any data records you no longer need.

Help and Tools

Learn

What mortgage recasting is, how it can save you money, and whether it's a good or bad idea.

What is a Mortgage Recast?

Based on my understanding of the term, recasting (also referred to as, re-amortization) is the lender saying to the borrower, "No, I won't let you pay off your loan early or reduce your interest rate, but I will let you lower your monthly payment if you make a minimum, one-time principal reduction ... for a fee."

In other words, recasting your mortgage will reduce the balance you owe, but since recasts typically don't include a shortening of the term or a lower interest rate, the net effect is simply a lower monthly mortgage payment.

Of course, since your monthly mortgage payment is reduced while everything else stays the same, this does result in interest savings. However, it's usually less than the level of savings you could achieve if all of your extra, lump sum and overpayments were applied to principal reduction at the time they are made.

Savings Comparison

The following example is based on:

  • Current balance of $100,000.
  • Monthly payment of $1,073.65.
  • 5% interest rate.

From this example you can get a good idea of the savings difference between a mortgage recast and what would happen if your mortgage lender would reduce your principal while keeping the same amortization schedule (Optimal terms).

TerTerTermsTermsLump
Sum
Pmt $
Lump
Sum
Pmt
Lump Sum PmtLump Sum Principal Payment
Bal $BalBalanceBalancePmt $PmtPmtMonthly PaymentNPRNPRNPRPmts LeftCost $CostsCostsInterest & FeesSave $SaveSaveSavings
CurCurCurrentCurrent0$0$0$0100K$100K$100,000$100,0001074$1074$1,074$1,07411926824$26824$26,824$26,8240$0$0$0
RecRecRecastRecast10K$10K$10,000$10,00090K$90K$90,000$90,000961$961$961$96111924532$24532$24,532$24,5322292$2292$2,292$2,292
OptOptOptimalOptimal10K$10K$10,000$10,00090K$90K$90,000$90,0001074$1074$1,074$1,07410420947$20947$20,947$20,9475877$5877$5,877$5,877
Rotate to landscape to view more complete formatting.All results are rounded to nearest dollar.All results are rounded to nearest dollar.All results are rounded to nearest dollar.
NPR: Number of Payment Remaining

NPR: Number of Payment Remaining

NPR: Number of Payment Remaining

In the above example, making a lump-sum principal reduction while continuing to make the original payment amount would save $3,585 more in interest charges than recasting, and you would pay off your mortgage 15 months sooner.

Is Recasting a Good or Bad Idea?

First, as I've stated in numerous places throughout this site, if you have higher interest debt and/or you don't have 3-6 months of income saved up in an emergency fund, you would likely benefit more from using any lump sum of cash for paying down high interest debt and building an emergency fund instead of paying down a mortgage balance (mortgages usually have the lowest interest rates, plus the interest payments may be tax-deductible).

Secondly, if your mortgage lender allows principal prepayments and credits them to your balance as they are made, and you can continue to make the original monthly payment amount, you would save more money just prepaying your principal instead of doing a formal recast.

On the other hand, if you have a fully-funded emergency fund, no higher interest debt, and your lender won't credit principal prepayments as they are made, then recasting your mortgage might be a good idea -- especially in cases where refinancing is either not an option or doesn't offer any significant savings.

Also, if recasting is your lender's only option for prepaying principal, recasting could help you escape Private Mortgage Insurance (PMI) earlier, which would save you more than the Mortgage Recast Calculator suggests.

Recasting Odds and Ends

Here are a few things to keep in mind if you're considering checking into a re-amortization to lower your payment:

  • Most lenders charge a fee for recasting ($150-$500) and most require a minimum principal payment ($1,000 - $10,000, or in some cases 10% of the balance owed).
  • Not all mortgages qualify for recasting.
  • Most lenders don't advertise that they offer recasting (they would rather make a lot of free money from refinancing or from keeping you on your existing mortgage terms). So be sure to ask your lender if they offer recasting, and if so, whether or not your mortgage qualifies.

Adjust Calculator Width:

Move the slider to left and right to adjust the calculator width. Note that the Help and Tools panel will be hidden when the calculator is too wide to fit both on the screen. Moving the slider to the left will bring the instructions and tools panel back into view.

Also note that some calculators will reformat to accommodate the screen size as you make the calculator wider or narrower. If the calculator is narrow, columns of entry rows will be converted to a vertical entry form, whereas a wider calculator will display columns of entry rows, and the entry fields will be smaller in size ... since they will not need to be "thumb friendly".

Show/Hide Popup Keypads:

Select Show or Hide to show or hide the popup keypad icons located next to numeric entry fields. These are generally only needed for mobile devices that don't have decimal points in their numeric keypads. So if you are on a desktop, you may find the calculator to be more user-friendly and less cluttered without them.

Stick/Unstick Tools:

Select Stick or Unstick to stick or unstick the help and tools panel. Selecting "Stick" will keep the panel in view while scrolling the calculator vertically. If you find that annoying, select "Unstick" to keep the panel in a stationary position.

If the tools panel becomes "Unstuck" on its own, try clicking "Unstick" and then "Stick" to re-stick the panel.