Mortgage Recast Glossary: Recasting, Reamortization & More

July 15, 2026

Mortgage recasting gets confused with prepayment and refinancing constantly, partly because the terminology overlaps. Here’s what each term actually means for the mortgage recast calculator.

Mortgage Recast (Reamortization)

Making a large lump-sum payment toward mortgage principal, after which the lender recalculates (reamortizes) the monthly payment based on the new, lower balance — while keeping the original interest rate and payoff date exactly the same. The lump sum reduces the monthly payment going forward, rather than shortening the loan term.

Reamortization

The specific calculation a recast triggers: rerunning the standard amortization formula with the new, reduced principal balance, the same interest rate, and the same number of remaining payments. See the mortgage recast calculator’s formula for the exact math.

Principal Curtailment

Another term for a lump-sum payment applied directly to a loan’s principal balance — used interchangeably with “recast” in some lender materials, since curtailment is the action that triggers reamortization.

Prepayment (Without Recast)

Making an extra payment toward principal without requesting a formal recast. The loan’s required monthly payment stays exactly the same as before (since the lender hasn’t reamortized), but the loan pays off faster because the reduced balance means fewer payments are needed to reach zero. This is a fundamentally different outcome from recasting — see mortgage recast vs. extra payments vs. refinancing for the full comparison.

Loan Servicer

The company that manages the day-to-day handling of a mortgage — collecting payments, managing escrow, and processing requests like a recast — which may or may not be the same company that originally issued the loan. Recast requests, minimum lump-sum requirements, and fees are all handled by the servicer, not by a standard, universal industry rule.

Recast Fee

A small, one-time processing fee lenders typically charge to perform a recast — commonly in the $150-$500 range, though this varies by servicer. This is dramatically smaller than refinance closing costs, which typically run 2-6% of the loan balance.

Amortization Schedule

The month-by-month breakdown of how a loan’s fixed payment splits between principal and interest over its full term, and how the remaining balance declines to zero by the final payment. A recast doesn’t change the interest rate or how amortization works — it restarts the schedule from a lower balance while keeping the same rate and remaining term.

Eligible Loan Types

Conventional loans — including jumbo loans and those backed by Fannie Mae or Freddie Mac — are generally eligible for recasting. FHA, VA, and USDA government-backed loans are generally not eligible. See how to request a mortgage recast from your lender for the full eligibility and request process.

Ready to see the exact payment reduction? Use the mortgage recast calculator, or see mortgage recast calculator examples for the math applied to different loan scenarios.