What Is a Mortgage Recast?
A mortgage recast, or re-amortization, is when a borrower makes a large lump-sum payment toward the principal and the lender recalculates the monthly payment over the remaining term. The interest rate and term stay the same, but the monthly payment goes down because the balance is smaller.
Recast vs. Refinance
A refinance replaces the loan with a new one, possibly at a new rate, with closing costs. A recast keeps the existing loan and usually involves a small fee. Not all loans, such as FHA and VA loans, can be recast.
Recast vs. Extra Payments
Extra payments without a recast shorten the loan but keep the same monthly payment.
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🔗 Related Terms
More Home Buying Terms
- Adjustable-Rate Mortgage (ARM)
- Appraisal Gap
- Assessed Value
- Bridge Loan
- Cash-Out Refinance
- Closing Costs
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.