This calculator helps you determine the impact of making an extra principal payment on your mortgage loan. You can see how it affects your monthly payments or loan term and how much interest you can save over time.
- Enter your original loan amount.
- Provide the annual interest rate of your loan.
- Input the original loan term in years.
- Specify the number of payments you have already made.
- Enter the extra principal payment amount.
- Select the recast option:
- Lower Payment: Reduces your monthly payment while keeping the loan term the same.
- Reduce Term: Keeps your monthly payment the same but shortens the loan term.
- Click “Calculate” to see the results.
Calculation Results:
Original Monthly Payment: $
New Monthly Payment: $
Monthly Payment Difference: $
Total Interest Savings: $
Loan Comparison Details:
| Original Loan | Recast Loan | |
|---|---|---|
| Original Loan Amount | $ | N/A |
| Remaining Balance | $ | $ |
| Monthly Payment | $ | $ |
| Total Interest | $ | $ |
| Remaining Term | years | years |
Example Scenario:
Original Loan Amount: $300,000
Annual Interest Rate: 4%
Original Loan Term: 30 years
Payments Made: 60 months (5 years)
Extra Principal Payment: $20,000
Recast Option: Reduce Term
Frequently Asked Questions
What is a mortgage recast?
A mortgage recast, also known as re-amortization, is a method to reduce your monthly mortgage payments by paying a lump sum toward your principal balance. The loan term and interest rate remain the same, but the monthly payments are recalculated based on the new, lower balance.
Is there a fee for recasting a mortgage?
Some lenders may charge a fee for recasting your mortgage, typically ranging from $150 to $500. It’s best to check with your lender for specific details.
What’s the difference between recasting and refinancing?
Recasting adjusts your existing loan’s amortization schedule after a lump sum payment, while refinancing involves replacing your current loan with a new one, possibly with different terms and interest rates.
