A mortgage recast allows you to make a large lump-sum payment toward your principal. Your lender then recalculates your remaining balance over the existing loan term, resulting in a lower monthly payment. Your interest rate and loan maturity stay the same.
Pros
- Lower monthly payment
- No change to your interest rate
- Minimal fees compared to refinancing
- Keeps your original loan term intact
Cons
- Requires a sizable lump-sum payment
- Not available on all loan types (typically excludes FHA and VA loans)
- Doesn’t shorten your loan term unless you continue paying extra
Who Is a Mortgage Recast Right For?
A recast can be ideal for homeowners with strong liquidity who want improved cash flow without the cost or complexity of refinancing—especially if they already have a favorable interest rate.
At Kerr Wealth Advisors, we help clients evaluate whether strategies like mortgage recasting align with their broader financial plan, ensuring your money is working efficiently for your long-term goals.
H. Brad Kerr IV, Vice President/ Wealth Management, Financial Advisor
215.619.3926/ bkerr4@janney.com
1767 Sentry Parkway West Suite 110 Blue Bell, PA 19422
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