Is There a Way to Lower My Monthly Payment, Such as Recasting, After I Sell My Home and Put a Lump Sum Toward My Mortgage?
Yes, for most conventional loans (including jumbo loans), a mortgage recast can lower your monthly payment after a lump sum payment, without a full refinance. The lump sum reduces your loan balance, and the servicer re-amortizes the remaining balance over your same remaining term at your same interest rate. It generally is not available on government backed loans, and the servicer still has to approve it.
Last updated July 22, 2026How does a mortgage recast work?
A recast is different from a refinance. There is no new loan, no new interest rate, and typically no new credit check or appraisal. You make a large lump sum payment toward your principal, often from home sale proceeds, an inheritance, or a bonus. The servicer then recalculates your monthly payment using the lower balance, the same remaining number of months, and your existing rate. Because the balance is smaller but the payoff date does not change, your required monthly payment drops.
Which loans qualify for recasting?
Recasting is generally offered on conventional loans, including conforming loans and jumbo loans. Government backed loans, meaning FHA, VA, and USDA loans, are generally not eligible for recasting under their program rules. Even on an eligible loan, approval is not automatic. Servicers typically review the request against factors such as a minimum lump sum amount, your payment history, and sometimes how long the loan has been in place.
What does a recast cost, and how long does it take?
Many lenders commonly charge a modest processing fee, often in the range of about $200 to $300. After you submit the lump sum and any required paperwork, it typically takes about two to eight weeks for the new lower payment to take effect, though some servicers can take longer, up to around ninety days in some cases. Until you receive the new payment schedule, you keep paying your original monthly amount.
It depends on your situation:
- If you have a conventional or jumbo loan, recasting is usually worth asking about, since it is generally available and can meaningfully lower your payment.
- If you have an FHA, VA, or USDA loan, recasting is generally not an option, so a lump sum would go toward principal but would not by itself trigger a new lower payment through this process.
- If your lump sum is smaller than your servicer's minimum threshold, or your payment history has issues, the servicer may decline the recast request even on an eligible loan type.
- If you want a lower payment quickly, a recast may still take a few weeks to process, so budget for paying your current amount in the meantime.
| Loan types generally eligible | Conventional and jumbo loans |
|---|---|
| Loan types generally not eligible | FHA, VA, USDA loans |
| Typical fee | Roughly $200 to $300 |
| Typical time to take effect | About 2 to 8 weeks, sometimes up to around 90 days |
| Rate and term change? | No, same rate and same remaining term |
| Credit check or appraisal usually required? | No |
Related questions
- do I Need a Home Appraisal for This Loan, or Can It Be Waived
- can I choose my own appraiser, use my own contact, or ask to avoid a specific appraiser
- do I Have to Pay for the Appraisal Out of Pocket, and Is It Refunded If My Loan Doesn't Close
- can I Reuse or Transfer an Appraisal I Already Paid For to a New Lender
- how much home equity you can access
Sources
- https://www.rocketmortgage.com/learn/recast-mortgage
- https://www.mrcooper.com/blog/recasting-a-mortgage
- https://www.pnc.com/insights/personal-finance/borrow/what-is-mortgage-recast.html
- https://www.experian.com/blogs/ask-experian/how-to-recast-mortgage
- https://www.amerisave.com/glossary/recasting-a-mortgage-what-it-means-and-how-it-works-in
- https://www.veteransunited.com/education/va-loan-recast
- https://www.chase.com/personal/mortgage/recast
- https://delawaremortgageloans.net/ask-mortgage-lender-about-recasting
- https://www.thetruthaboutmortgage.com/mortgage-recast-calculator
- https://www.myuwmloan.com/help-center/payments/mortgage-recast
- https://www.experian.com/blogs/ask-experian/what-is-mortgage-recasting
- https://www.bankrate.com/mortgages/what-is-mortgage-recasting-and-why-do-it
Educational information only, not individualized financial or legal advice. Program details and rates change; verify current terms with a licensed loan officer before making a decision.