What is the Mortgage Recast Calculator?
The Mortgage Recast Calculator helps homeowners determine how much their monthly mortgage payment will decrease after making a lump-sum payment toward their principal. It calculates the impact of a payment on the remaining loan balance and helps you plan your finances for long-term savings.
Recast Mortgage Calculator
Mortgage Recast Savings:
| Category | Original | New | Savings |
|---|---|---|---|
| Monthly Payment | |||
| Total Interest Paid | |||
| Payoff Period |
What is Mortgage Recast Calculator?
The Mortgage Recast Calculator estimates how much your mortgage payments will decrease after making a lump-sum payment. It helps homeowners understand the financial impact of paying down the principal and plan their future payments accordingly.
How to Use Mortgage Recast Calculator?
To use the Mortgage Recast Calculator, simply enter your current loan amount, annual interest rate, loan term, and the lump-sum payment you're planning to make. Click "Calculate New Payment" to see how your monthly payments will change after the recast.
What is the Formula of Mortgage Recast Calculator?
The formula used to calculate the new monthly payment after a recast is as follows:
New Monthly Payment = P * (r(1+r)^n) / ((1+r)^n - 1)
Where: - P is the new loan balance (original loan minus lump-sum payment) - r is the monthly interest rate (annual rate divided by 12) - n is the number of months remaining (loan term in months)
Advantages of Mortgage Recast Calculator:
- Helps homeowners save money on interest over time.
- Reduces monthly payments without refinancing.
- Provides an easy way to understand the impact of lump-sum payments.
- Helps with financial planning and budgeting.
Disadvantages of Mortgage Recast Calculator:
- Requires a lump-sum payment, which may not be feasible for all homeowners.
- Does not change the loan term; the borrower is still obligated to repay the loan in the same period.
- Not all lenders offer the option of mortgage recasting.