Where every dollar of a mortgage payment goes
Recasting vs refinancing
In one paragraph
A recast keeps your loan, rate and payoff date but re-amortizes the lower balance after a large principal payment, so the required payment drops. A refinance replaces the loan with a new one, with a new rate, term and closing costs. Not every servicer or loan type allows recasting, so ask first.
Last reviewed against the primary sources listed below.
Side by side
| Recast | Refinance | |
|---|---|---|
| Same loan | Yes | No, a new loan |
| Rate changes | No | Yes, to the new loan's rate |
| Credit check | Usually not | Yes |
| Costs | A servicer fee, if any | Closing costs |
| Needs a lump sum | Yes | No |
When a recast fits
After a home sale, inheritance or bonus, when you like your rate and want a lower required payment.
When a refinance fits
When the rate or term itself needs to change, or you need to remove a borrower. Compare Loan Estimates before you decide.
Common questions about interest
What is a recast mortgage?
A recast re-amortizes your existing loan after a large principal payment. Rate and payoff date stay the same; the required payment falls.
Can every loan be recast?
No. It depends on the servicer and loan type, and some government-backed loans generally cannot be recast. Ask your servicer.