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Mortgage Recast Calculator

Pay a lump sum, keep the same end date, and lower the monthly payment.

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Results update as you type. Nothing is sent anywhere.

New monthly payment —
Lower each month by —
Payment now —
Interest saved over the remaining term —
Interest saved after the fee —

How this is worked out

A recast — some lenders call it re-amortisation — is the quiet option that sits between doing nothing and remortgaging.

You pay a lump sum off the balance. The lender then recalculates the monthly payment on the smaller balance, over the same remaining term, at the same interest rate. Nothing else changes: no new agreement, no affordability check, no valuation, usually just an administration fee.

The payment comes from the standard amortisation formula, run twice — once on today's balance and once on the balance after the lump sum:

payment = balance × i ÷ (1 − (1 + i)^−n)

where i is the monthly interest rate and n the number of months left.

Interest saved is the difference between total payments and principal in each case. It is real money, but it arrives slowly, spread across the whole remaining term.

A worked example

250,000 left at 5.5% with 22 years to run, paying in 40,000:

  • Payment now: about 1,613 a month
  • After the recast: about 1,355 a month
  • You keep about 258 a month
  • Interest saved across the remaining 22 years: about 28,100
  • After a 250 fee: about 27,850

The end date does not move. February 2048 before, February 2048 after.

What this doesn't cover

  • Not every lender offers it. It is common in the United States and unusual elsewhere; in the UK and much of Europe an overpayment normally shortens the term instead, and you have to ask for the payment to be recalculated.
  • A recast is not a remortgage. The rate is untouched. If your rate is well above current market rates, compare this against refinancing before committing the cash.
  • Overpaying without a recast usually saves more interest overall, because the term shortens instead of the payment falling. Recasting buys monthly breathing room; overpaying buys an earlier finish. They are different goals.
  • Lenders often set a minimum lump sum and may not allow it on every product.
  • The money is gone once it is in the house. Check the emergency fund first.

Common questions

Does a recast change my interest rate or my end date?

Neither. That is the whole point of it. The rate stays exactly as it is and the final payment falls on the same month as before — only the size of each payment changes.

Is recasting better than just overpaying?

It depends what you want. The same lump sum paid as a normal overpayment usually saves more interest, because the loan finishes earlier. A recast saves less in total but cuts the committed monthly cost, which matters if income is tight or uncertain.

Can I recast after making several overpayments?

Often yes — many lenders will recalculate the payment on request once the balance has fallen, whether the reduction came from one lump sum or several. It is worth asking, because the payment usually does not drop on its own.

What does it cost?

Typically a flat administration fee, often a few hundred at most. Put the figure in above and the last line shows the interest saved net of it.

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