Mortgage Recast Calculator - Best Tools 2024

Mortgage Recast Calculator is used to calculate how much you can save each month by recasting your existing mortgage.

Current Principal ($):
Annual Interest Rate (%):
Current Monthly Payment ($):
Lump Sum Payment ($):
Remaining Loan Term (Years):

Frequently Asked Questions

What is a Mortgage Recast Calculator?

A Mortgage Recast Calculator is a tool used to estimate how your monthly mortgage payments will change after making a lump sum payment towards your loan principal. It helps borrowers understand the potential benefits of a mortgage recast.

What is a mortgage recast?

A mortgage recast, also known as a loan reamortization, involves making a lump sum payment towards the principal of your mortgage, which reduces the outstanding balance and results in a lower monthly payment without changing the interest rate or loan term.

What inputs do I need to use the Mortgage Recast Calculator?

You will need the following inputs: Current principal balance, Annual interest rate (percentage), Current monthly payment, Lump sum payment amount, and Remaining loan term (in years).

How does a mortgage recast differ from refinancing?

A mortgage recast only involves making a lump sum payment to reduce the principal and recalculating the monthly payments. It does not change the interest rate or loan term. Refinancing, on the other hand, involves replacing your existing loan with a new one, potentially changing the interest rate and loan term.

Can I recast my mortgage at any time?

Most lenders allow mortgage recasting at any time during the loan term, but there may be restrictions on the minimum lump sum amount and the frequency of recasts. Check with your lender for specific policies.

Are there fees associated with a mortgage recast?

Yes, some lenders charge a fee for recasting a mortgage, typically a few hundred dollars. It's important to check with your lender to understand any costs involved.

How is the new monthly payment calculated?

The new monthly payment is calculated based on the reduced principal balance after the lump sum payment, the existing interest rate, and the remaining loan term. The Mortgage Recast Calculator can perform these calculations automatically.

Will a mortgage recast affect my credit score?

A mortgage recast does not directly affect your credit score since it does not involve a new loan application or credit inquiry. However, reducing your loan balance through a lump sum payment may positively impact your credit utilization ratio.

Is a mortgage recast suitable for everyone?

A mortgage recast is beneficial for borrowers who have a lump sum of money available and wish to lower their monthly mortgage payments without altering the loan's interest rate or term. Those looking to lower their interest rate or change the loan term might find refinancing more suitable.

How can I determine if a mortgage recast is right for me?

Use the Mortgage Recast Calculator to simulate different lump sum payment scenarios and see how they affect your new monthly payment. Consider your financial situation, future plans, and consult with a financial advisor to determine if a mortgage recast is a good option for you.

What is the impact of a mortgage recast on my loan term?

A mortgage recast does not change the original loan term. It simply recalculates the monthly payments based on the reduced principal balance, meaning you will continue to pay off the loan within the initially agreed-upon timeframe.