Step-by-Step Guide to Using Mortgage Recast Calculator

Mortgage Recast Calculator

Are you planning a lump sum payment to reduce your principal loan amount, but are unsure how it would affect your current monthly payment?

Paying a loan EMI is the biggest financial burden. Skipping for any reason costs a high penalty and a low credit score.

Many times, people think about refinancing to pay off old mortgages, but instead of reducing financial stress, it increases the burden of monthly payments.

But mortgage recasting is the most efficient way to reduce the burden of a high interest rate on monthly payments. If you need clarification on mortgage recasting, like how much it affects your monthly payment, you can use a mortgage recast calculator for that.

So you have a question: “What is a mortgage recast calculator?” Let’s keep reading this blog post, as I have explained everything in detail.

What is a Mortgage Recast Calculator?

The process of adjusting the monthly payment of the mortgage amount or principal loan amount involves making lump sum payments towards the principal amount of the loan. This process is known as mortgage recasting.

The calculators used to determine the impact of lump-sum payments on monthly payments are referred to as mortgage recast calculators.

Let’s understand this with an example.

Imagine Steve took a loan of $300,000 at an interest rate of 6% for 30 years. The lender deducted $1800 as a monthly payment for this loan.

Let’s say, after going like this for several years, the principal amount is reduced to $250,000.

Fortunately, Steve received $100,000 from their business or their savings, and he decided to use this amount to repay their principal loan amount, but he didn’t know how much it reduced their monthly payment and interest rate.

That’s where he used the recast mortgage calculator.

When he entered all those above numbers, like their original loan amount, interest rate, lump sum payment, etc. The mortgage calculator recalculates and shows him the new loan balance of $150,000 and the interest rate after the lump sum payment of $100,000.

Apart from this, the recast mortgage calculator also shows him the exact amount of the new monthly payment.

How Does the Mortgage Recast Calculator Work?

Let’s understand how this recasting calculator works and how you can leverage it.

Input Information

To evaluate your monthly payment, you first enter a few pieces of information, such as

  • your original loan amount
  • interest rate
  • exact time period
  • lump sum amount you are paying towards your original loan amount


After inserting the above information, when you enter ‘calculate’, the calculator recalculates new monthly payments and reduces the interest rate based on the outstanding principal amount after the lump sum payment.

In the above section, “What is a recast mortgage calculator?”  I have already explained this with an example; you can check that to understand it better.

Visual Data Evaluation

Some recast mortgage calculators also provide a visual representation of how lump-sum payments impact monthly payments and interest rates. This will help users understand their effects in the upcoming years.

Benefits of a Mortgage Recast Calculator

Here are some key benefits of the recast mortgage calculator you should know:

  • Time-Saving: It’s time-consuming to calculate mortgage amounts manually. But with the help of a recast mortgage calculator, you can calculate the mortgage amount in just a second.
  • To Estimate the Impact of Recasting: Let’s say you are planning to pay a lump sum amount toward your principal loan amount but don’t know how it affects your monthly payment amount. You can use a recast mortgage calculator to understand the impact of recasting on your monthly payment and how much it can reduce your outstanding principal amount.
  • Lower Interest Rate: When you use a recast mortgage calculator to evaluate the recasting amount on monthly payments, it will help you to evaluate how much the interest rate is reduced.

Top 5 Mortgage Recast Calculators for Homeowners

To provide an estimation of the effect of a lump-sum payment on monthly payments, a mortgage calculator can be a valuable tool. But which one is accurate and efficient? How would you know that?

Here in this section, I’m going to cover the top 5 recast mortgage calculators.

Amortization Schedule

This is the most searchable mortgage recast evaluation tool on the internet. When you insert your information into this calculator, it will show you the detailed analysis report in the form of charts and graphs.

Apart from this, it will also show the comparison between the recast mortgage and the original mortgage.

Bankrate Mortgage Recast Calculator

Bankrate is one of the most accurate mortgage calculators, and that’s why I put it in the second number. When you open its recast mortgage calculator, you just have to enter all your information in the section and then click on the ‘calculate’ tab to get a result. The best thing about this calculator is that it explains everything in detail with a visual representation.

CCPC Calculator

If you are recently planning a lump-sum payment toward your mortgage, with this calculator, you can calculate how it can affect your monthly payment.

NerdWallet Mortgage Recast Calculator

NerdWallet is the most trusted website, providing so much great information on money and finance. It also provides an option to calculate the mortgage recast. With its comprehensive information, you can easily find the effect of lump-sum payments on your monthly payment.

Tableau Public

This is just a simple calculation tool to evaluate mortgage recasting. It doesn’t provide you with much information like visual representations, comparisons, etc., but you can still use it to calculate your mortgage recasting.


If you take out a loan, the monthly payment of your loan or mortgage can be stressful for you. Maybe you can’t completely get rid of this. But surely, you can reduce the burden of your monthly payment to some extent. The only way to do this is by paying a lump sum against your loan. You can easily measure the impact of the lump sum amount with the help of a mortgage recast calculator. Furthermore, this blog also reflects the top 5 recast mortgage calculators that you can use to analyze your mortgage.

We hope this article will be helpful to you. Stay tuned for upcoming articles.

READ MORE: The Essential Guide to Car Insurance in Clovis Otosigna

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