Recast Mortgage vs Extra Monthly Principal
**Extra principal** each month cuts total interest and shortens the loan but keeps the required payment the same. A **recast** applies a lump sum and resets a lower payment while keeping rate and term—useful after a windfall.
Step by step
1. Check recast fee
Lenders may charge $200-300 processing for recast.
2. Compare interest saved
Extra principal often saves more interest than recast alone.
3. Keep liquidity
Recast cash is sunk—ensure emergency fund remains intact.
Recast vs extra principal
Recast lowers mandatory payment; extra principal maximizes interest savings.
- Recast: Lower monthly bill; lump sum required; term unchanged.
- Extra principal: Faster payoff; flexible amounts; payment unchanged.
Use our calculators
Common mistakes
- Recasting without minimum lump sum
- Stopping extra principal after recast when still affordable
FAQ
Does recast require appraisal?
Usually not—unlike refinance; lender rules vary.