A Mortgage Recast (also called Loan Re-Amortization) allows a homeowner who makes a substantial lump-sum principal curtailment (typically $10,000 or more, such as proceeds from selling a previous home, an inheritance, or an annual bonus) to permanently reduce their required monthly principal and interest payment without refinancing.
Normally, if you make an extra lump-sum payment on a fixed-rate mortgage, your loan pays off years earlier, but your required monthly payment remains identical. When you request a Mortgage Recast: 1. Interest Rate Preserved: Your original note rate (e.g., a low 3.25% or 4.50% rate) remains 100% unchanged. 2. Remaining Term Preserved: If you have 26 years (312 months) left on your loan, the new payment is re-amortized over those exact 312 remaining months. 3. Minimal Administrative Fee: Requires zero credit check, zero property appraisal, and zero closing costs — only a flat servicer administrative fee of $150 to $500.