What is a mortgage recast, and how does it lower my payment without refinancing?

A recast, or re-amortization, lets you make a large lump-sum payment toward principal, after which the lender recalculates your monthly payment over the remaining term at your existing rate. Because the balance is smaller, your payment drops, but your interest rate and loan term stay the same. It is far cheaper than refinancing, often just a few hundred dollars, and requires no new credit check or appraisal. Recasting is ideal after a windfall, a bonus, or the sale of a previous home, especially when your current rate is already low and you would not want to refinance into a higher one. Most conventional loans allow it, though FHA, VA, and USDA loans generally do not. Ask your servicer for its minimum lump-sum and fee.