Mortgage Recast
The mortgage recast is one of the main ways to refinance. Here is the plain-English rundown for 2026.
How it works
A mortgage recast isn't a refinance - you make a large lump-sum payment toward principal and the lender re-amortizes your loan, lowering the monthly payment while keeping your existing rate and term. It typically costs just $150-$500 with no new appraisal or underwriting, making it cheap when you already have a great rate.
Key things to know
- Weigh the new rate and term against your current loan — a refinance resets the clock.
- Budget 2-5% of the balance in closing costs (or roll them in for a higher rate).
- Find your break-even: costs divided by monthly savings.
- Cash-out is capped at 80% LTV conventional/FHA; VA cash-out can reach 100%.
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Frequently Asked Questions
- What is the mortgage recast?
- A mortgage recast isn't a refinance - you make a large lump-sum payment toward principal and the lender re-amortizes your loan, lowering the monthly payment while keeping your existing rate and term. It typically costs just $150-$500 with no new appraisal or underwriting, making it cheap when you already have a great rate.
- What does it cost?
- Most refinances run 2-5% of the loan in closing costs. A no-closing-cost version trades those fees for a slightly higher rate.