What is a mortgage recast and how is it different from a refinance?
A recast applies a large principal payment and re-amortizes your existing loan to a lower payment, keeping your rate and term. A refinance replaces the loan entirely, with new terms and closing costs.
Mortgage Payoff · Written by Anil Aggarwal, Realtor® | Mortgage Loan Officer · Updated August 8, 2026
Recasting usually costs a small fee rather than full closing costs, but not every loan or servicer allows it.
A recast lowers the payment without lowering the rate; a refinance can lower the rate but restarts or resets the term.
If you are weighing a lump sum against a refinance, compare payment, total interest and payoff date for both.
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