The short answer
If you already hold a low fixed interest rate and you've come into a lump sum, a mortgage recast is almost always the cheaper, simpler choice. It lowers your monthly payment for a one-time fee of $150–$500 while keeping your rate untouched. A refinance only beats it when today's market rates are meaningfully lower than the rate you currently pay — low enough that the new rate offsets thousands in closing costs.
Mortgage recast vs refinance: full comparison
| Factor | Mortgage recast | Refinance |
|---|---|---|
| Cost | One-time fee of $150–$500 | 2–6% of loan balance in closing costs |
| Interest rate | Stays the same | New rate (today's market rate) |
| Credit check | None | Required — full underwriting |
| Loan term | Unchanged — same payoff date | Resets (new 15- or 30-year clock) |
| Monthly payment | Lower (smaller balance, same rate) | Lower or higher, depending on new rate and term |
| Lump sum needed | Yes — typically $5,000–$10,000 minimum | No lump sum required |
| Time to complete | ~30–45 days | ~30–60 days |
| Eligible loans | Conventional & many jumbo (not FHA/VA/USDA) | Most loan types, including FHA/VA/USDA |
| When it wins | You hold a low rate and have cash to deploy | Current rates are well below your existing rate |
How a mortgage recast works
With a recast — also called re-amortization — you make a large one-time payment toward principal, and your lender recalculates your monthly payment over the remaining term at your existing rate. Nothing else about the loan changes. There's no credit check, no appraisal, and no closing costs — just a modest fee. Because the rate and payoff date are preserved, recasting is the natural choice for anyone protecting a sub-5% rate locked in during a low-rate window.
How a refinance works
A refinance pays off your current mortgage with an entirely new loan. You get a new rate, a new term, and a fresh amortization schedule, but you also pay 2–6% of the balance in closing costs and go through full underwriting with a credit check. On a $300,000 loan, that's roughly $6,000–$18,000 up front. Refinancing shines when rates have fallen: dropping from 7% to 5% can save far more over the life of the loan than any recast, even after closing costs.
Run your own numbers
The calculator below shows exactly what a recast would do to your payment and total interest. Compare that figure against a refinance quote at today's rates — if the rate difference is large, the refinance may pull ahead; if it's small or zero, the recast almost always wins on cost.
Is your rate well above today's rates?
If your current mortgage rate sits well above the rates lenders are offering now, refinancing may save more than a recast — even after closing costs. It's worth pulling a quick refinance quote to compare against the recast numbers below.