A bonus, an inheritance, home sale proceeds: however the extra cash showed up, you have two very different tools for lowering your payment with it. Recasting and refinancing are often confused, but the math behind them isn't close.
What each one actually does
A recast keeps your existing loan, rate, and term exactly as they are. You make a large lump-sum payment toward principal, and your servicer re-amortizes the remaining balance over the same remaining term, which lowers your required monthly payment. A refinance replaces your loan entirely with a new one, at a new rate, new term, and new closing costs.
Side-by-side
| Recast | Refinance | |
|---|---|---|
| Changes your rate? | No | Yes |
| Changes your term? | No | Yes, if you choose |
| Requires a credit check? | Usually no | Yes |
| Typical cost | $150–$500 flat fee | 2–5% of balance |
| Requires a lump sum? | Yes | No |
| Best when... | Your rate is already good | Today's rate beats yours |
If your current rate is already at or below today's market rate, a recast almost always wins. You get a lower payment for a few hundred dollars with none of the rate risk or paperwork of a refinance. If today's rate is meaningfully lower than yours, refinancing usually wins even after closing costs, once you run the break-even math.
When a recast makes more sense
- Your rate is already competitive. There's no rate benefit to refinancing, so paying 2–5% in closing costs to get the same rate you already have is pure waste.
- You want to avoid a new credit pull and underwriting. Recasting is largely an administrative request, not a new loan approval.
- You have a lump sum but don't need cash out. If you're not trying to tap equity, a recast gets you the lower payment without the overhead of a full refinance.
When a refinance makes more sense
- Today's rate is meaningfully below yours. The rate change itself is the source of the savings, which only a refinance can capture.
- You want to change your term. Recasting can't shorten or extend your loan term; only a refinance can.
- You need cash out. A cash-out refinance lets you tap equity; recasting requires you to put cash in, not take it out.
"If your rate is already competitive, a $300 recast fee usually beats a refinance's 2–5% closing costs every time."
Before deciding, run your numbers through our free refinance break-even calculator, which uses today's live 30-year rate. If it doesn't beat yours, a recast is almost certainly the better deal.
Whichever path fits, the decision comes down to comparing your current rate to what's actually available today. CasaCrow tracks live market rates continuously so you know the moment refinancing starts to make sense.
Know your break-even before you decide
CasaCrow compares your loan against live market rates automatically.
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