A mortgage recast (or re-amortization) is when a homeowner makes a large lump-sum payment toward their existing loan’s principal balance, and the lender recalculates the remaining monthly payments based on that new, lower balance.
The defining feature of a recast is that your interest rate and original loan term remain exactly the same. Instead of shortening the life of your loan, it restructures your payment schedule to give you a significantly lower minimum monthly payment. How It Works
When you make normal extra payments toward your mortgage, your principal shrinks, but your monthly bill stays exactly the same—you just end up paying off the loan sooner.
When you formally request a recast through your loan servicer, the process changes:
Lump-Sum Payment: You pay a significant chunk of money directly to the principal balance.
Re-Amortization: The lender stretches this new, smaller balance across the time remaining on your original term (e.g., if you have 22 years left on a 30-year mortgage, they recalculate payments over 22 years).
Reduced Bill: Your required monthly principal and interest payment drops permanently. Requirements and Costs Recast your mortgage loan – Chase Bank
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