What is a mortgage recast?
A mortgage recast lets an eligible homeowner ask the servicer to recalculate the required principal-and-interest payment after additional principal payments reduce the loan balance.
The calculation spreads the reduced balance over the remaining repayment period using the existing loan's interest-rate terms. A standard recast does not replace the loan or start a new 30-year term. Fannie Mae: Principal curtailment and recasting.
On a fixed-rate mortgage, the fixed rate stays the same. If an adjustable-rate loan is eligible, a recast does not eliminate its future scheduled rate adjustments.
This resource covers an elective recast following a principal reduction. Hardship assistance and other loan modifications follow different processes.
What changes and what stays in place?
| Part of the mortgage | Effect of a standard elective recast |
|---|---|
| Principal balance | Reduced by the additional principal paid |
| Required principal-and-interest payment | Recalculated using the lower balance |
| Interest-rate terms | Preserved; an ARM can still adjust under its existing terms |
| Remaining contractual term | Preserved |
| Property taxes and insurance | Remain separate expenses; a recast does not reduce the underlying bills |
| PMI | Requires a separate eligibility review; recasting does not itself cancel it |
The servicer provides the final payment and effective date. The total mortgage payment may still change when taxes, insurance or other applicable components change. Chase recast guidance and Bank of America recast FAQ.
Recasting, extra principal or refinancing?
| Option | What happens | Main consideration |
|---|---|---|
| Extra principal without a recast | The balance falls; the required principal-and-interest payment generally stays the same | Continuing the former payment can pay the loan off sooner |
| Extra principal followed by a recast | The balance falls and the required payment is recalculated over the remaining term | Creates monthly flexibility; paying only the lower amount gives up some accelerated-payoff interest savings |
| Refinancing | A new mortgage replaces the existing one | Compare qualification, rate, term, closing costs and total borrowing cost |
The relevant comparison is what happens after the same extra principal payment. Paying the former, higher amount generally repays that reduced balance faster than paying only the new recast amount. A recast can still give you the option to pay extra when your budget permits. Chase: Mortgage recasting.
A hypothetical payment example
Assume an existing, fully amortizing fixed-rate mortgage has:
- A $400,000 principal balance.
- A 5.00% assumed interest rate.
- 25 years, or 300 monthly payments, remaining.
- A $50,000 additional principal payment, reducing the balance to $350,000.
| Calculation | Monthly principal and interest |
|---|---|
| $400,000 over 300 months at the assumed rate | $2,338.36 |
| $350,000 recast over the same 300 months at the same rate | $2,046.07 |
The required principal-and-interest payment falls by approximately $292 per month.
This is an educational calculation for an existing loan, not a current rate quote or loan offer. It excludes taxes, homeowners insurance, mortgage insurance and fees. It assumes the stated balance and remaining term at the time of adjustment; the servicer's result depends on actual dates, payment application and rounding.
The cash commitment is the $50,000 principal payment plus any applicable fee. Treating the fee alone as the cost would omit most of the money being committed to the mortgage.
What does a recast cost and how long does it take?
There is no single fee or timeline for every loan. Some servicers publish a fee such as $250; others offer eligible recasts without a fee. Some publish processing periods of up to 90 days. Ask about both the time needed to complete the request and the date the lower payment becomes effective.
For example, Rocket's published guidance lists $250 and up to 90 days. Chase and Bank of America publish no-fee options for eligible loans. These are examples checked November 12, 2026; your servicer must confirm the terms for your account. Rocket, Chase fee schedule and Bank of America FAQ.
Minimum principal reductions, required payment history and how often a loan can be recast also vary. Confirm these before sending money specifically for a recast.
Which mortgages can be recast?
Some conventional mortgages qualify. Jumbo and other portfolio loans depend on the investor and servicer.
FHA, VA and USDA loans generally do not offer the ordinary elective recast described here; Chase and Rocket exclude them from their recast programs. That is separate from hardship-assistance programs.
A recast often avoids the full underwriting required for a refinance. For example, Chase states that its recast does not require an appraisal or credit check. Ask what your own servicer requires instead of assuming every program is identical. Chase eligibility and process and Rocket recast requirements.
How to request a recast from your servicer
- Ask whether your specific loan qualifies. Contact the company on your current statement. Give the approximate additional principal amount you are considering. Obtain eligibility requirements before committing the money.
- Confirm the details in writing. Ask about the minimum principal reduction, any fee, required account history, waiting periods, frequency limits, forms, signatures and funding deadlines.
- Ask about the payment calculation. Request an estimate if the servicer offers one and ask what happens if you decide not to proceed after seeing the agreement. Not all servicers supply an advance quote. Understand that money already applied to principal should not be treated as withdrawable cash.
- Follow the instructions for applying funds to principal. Ask for the correct submission method and sequence. Do not assume a large payment will automatically trigger a recast or be treated exactly as you intend. Fannie Mae: Additional principal payments.
- Complete the request and agreement. Submit the required paperwork, principal payment and any fee in the specified order. Review the new payment, remaining term and effective date before signing the agreement.
- Continue paying the billed amount until the change takes effect. Processing does not suspend regular payments. Confirm the updated statement and automatic-payment arrangements.
- Ask separately about PMI. If the principal reduction may satisfy a cancellation threshold, request that review as well. The PMI removal guide explains the different routes.
Sample inquiry to your servicer
Subject: Mortgage recast eligibility and requirements
I am considering an additional principal payment of $[amount] and would like to know whether my mortgage qualifies for a recast.
Please confirm the minimum principal reduction, any fee, payment-history or loan-age requirements, required documents and signatures and the correct way to submit the funds.
If available, please provide an estimated new principal-and-interest payment. Please explain the expected processing time, the payment-effective date and what happens if I choose not to sign the recast agreement after making a principal payment.
Please also explain how to request a separate PMI cancellation review if the principal reduction makes me eligible.
When might recasting be useful?
Recasting can be worth exploring when you want a smaller required payment, prefer to keep your existing mortgage terms and have enough funds for both the principal reduction and your other cash needs.
For example, a homeowner may want to apply proceeds from selling a previous home after buying the next one. Before relying on that plan, confirm the new loan's recast eligibility and timing.
The tradeoff is access to cash. Money paid into principal becomes home equity. Consider emergency savings, upcoming expenses, other debts and how long you expect to keep the property before committing a substantial amount.
If your main goal is the earliest possible payoff, compare recasting with making the same principal payment and continuing your previous monthly payment. If you need to change the interest rate or loan structure, compare refinancing separately.
Does a recast change escrow or remove PMI?
A recast does not lower property-tax bills or insurance premiums. Your tax-and-insurance escrow payment can still change after an escrow analysis.
A lower principal balance may help you qualify to remove PMI, but cancellation has its own rules and request process. Ask the servicer to identify each approved change and its effective date.
Your current servicer approves and completes a recast. ECHL can help you understand how keeping your current loan compares with available refinancing options.