Mortgage Recast Calculator Methodology and Formulas

This page documents exactly how the recast calculator computes every number it shows, so you can check our math or reproduce it in a spreadsheet. Nothing here is proprietary: it is the standard amortization arithmetic your servicer uses, applied carefully.

The amortization formula

Monthly principal and interest (P&I) on a fixed-rate loan comes from the standard formula:

• M is the monthly P&I payment.
• P is the principal balance being amortized.
• r is the monthly interest rate: the annual rate divided by 12. A 6.5% annual rate means r = 0.065 / 12.
• n is the number of monthly payments remaining.

How the recast is modeled

A recast is a re-amortization: the servicer takes your current balance minus the lump-sum principal payment, then re-runs the formula above over the same remaining term at the same interest rate. Nothing else changes: no new rate, no new payoff date, no new loan. That definition comes straight from the GSE servicing rules, Fannie Mae Servicing Guide C-1.2-01 and Freddie Mac Guide 8103.3, and it is exactly what the calculator does. For the plain English version, see how mortgage recasting works.

Rounding and precision

• Integer-cent arithmetic. All balances, interest accruals, and payments are carried as whole cents, not floating-point dollars, to avoid the drift that binary floating point introduces over a 360-payment schedule.
• The payment is rounded up, so the loan always clears on time. A fixed monthly payment almost never divides a balance perfectly. We round the monthly payment up to the nearest cent, which guarantees the balance reaches zero on or before the final scheduled month of the term you entered. There is never a phantom extra payment past the end of the term.
• The final payment absorbs whatever is left. Because the payment is rounded up, the last payment in the schedule is smaller than the others: it is exactly the remaining balance plus that month's interest. That is the same behavior a servicer's own schedule shows.
• Break-even months. Break-even on a recast fee is the fee divided by the monthly payment savings, rounded up to the next whole month. A $250 fee and $73 monthly savings show as 4 months, not 3.42.

The refinance comparison

The recast vs refinance scenario models a refinance as a brand new loan at the rate and term you enter, with closing costs counted as upfront cash out of pocket, the same way the recast fee and lump sum are. The extra payments comparison uses the same engine with the payment held constant.

One assumption in that refinance row is worth stating outright, because it changes the numbers. We assume you apply the same lump sum at closing. The refinance is therefore modeled on your current balance minus the lump sum, not on the full balance, and "cash needed now" for the refinance is the closing costs plus the lump sum. We do it this way so that all four scenarios put the identical amount of cash on the table, which is the only way the monthly payments are comparable. If you would rather refinance the full balance and keep the lump sum, the refinance payment would be higher than the figure we show and the upfront cash lower.

Estimates, not quotes

All figures are estimates. Your servicer's math may differ slightly: day-count conventions, the exact date a curtailment posts, escrow changes, and internal rounding rules all move the result by a few dollars. Treat the calculator as a planning tool and get the binding number from the signed recast agreement your servicer sends. Whether the whole exercise is worth it is covered in is recasting worth it.

How we source lender data

Lender fees and minimums on this site were verified from official servicer documents in August 2026: published fee schedules, help-center pages, and servicing bulletins. Each figure is linked to its source on our recast fees page and on the individual lender pages. Where a servicer does not publish a figure, we mark it as not published and recommend calling the servicer directly, rather than repeating unverified third-party numbers. Spotted a change? Tell us and include a link to the official document.