Reamortizing a mortgage is the same as recasting
Let's clear up the terminology first, because it confuses a lot of homeowners: reamortizing a mortgage and recasting a mortgage are the same thing. "Re-amortize" is the technical verb for what happens during a recast — your lender recalculates the amortization schedule on a smaller balance. You'll see lenders use both words, sometimes in the same sentence. If you've read about mortgage recasting, you already understand re-amortization.
Here's the mechanic in one line: you make a large lump-sum payment to principal, and the lender re-amortizes the remaining balance over the same remaining term at the same interest rate. Your monthly payment drops; your rate and payoff date don't move.
The mechanics of re-amortization
A mortgage payment is calculated from three inputs: the balance, the interest rate, and the number of months left. Re-amortization changes only the balance. When you cut the balance with a lump sum but hold the rate and term steady, the formula produces a smaller required payment. Walk through it:
- Before: a $300,000 balance amortized over 25 remaining years at your fixed rate produces payment A.
- You pay: a $50,000 lump sum to principal, dropping the balance to $250,000.
- After re-amortization: $250,000 over the same 25 years at the same rate produces a lower payment B.
Because the rate and the number of months never change, the recast doesn't extend your loan or cost you extra interest the way restarting a 30-year clock in a refinance can. The calculator above runs this exact math for your real numbers and shows the before-and-after schedule.
What re-amortizing costs and which loans qualify
The only direct cost is a one-time re-amortization (recast) fee, typically $150 to $500. There's no credit check, no appraisal, and no closing costs. Most lenders require a minimum lump sum, commonly $5,000 to $10,000. Eligibility comes down to loan type: conventional and many jumbo loans can be re-amortized, while FHA, VA, and USDA loans generally cannot. Minimums and fees vary by servicer — check our lender recast policies for specifics.
When re-amortizing makes sense
Re-amortizing shines when you hold a low fixed rate you don't want to lose, you've come into a lump sum, and you'd rather lower your monthly payment than pay the loan off faster. If you'd rather be debt-free sooner, extra principal payments without a re-amortization keep your payment high and shorten the term instead — compare the two in our recast vs. extra payments tool. And if you're unsure whether the whole move is worth it, read is mortgage recasting worth it. For the broader picture across loan types, see mortgage loan recasting.