Compare
Mortgage recast vs refinance: which lowers the payment
Compare a mortgage recast with a refinance. A recast keeps your rate and term. A refinance can change rate, term, and insurance, but it resets closing costs and the clock.
Keep the loan or replace it
A recast keeps your existing note. A refinance replaces it. If your interest rate is already low, a recast after a lump sum is often cheaper than paying closing costs to refinance into a higher rate.
PMI and MIP differences
A refinance into a conventional loan with 20 percent equity can eliminate PMI or MIP entirely. A recast only changes the payment on the same loan. It may help you reach a PMI cancellation threshold, but it does not by itself cancel insurance. After a recast, send a cancellation request if you now meet an HPA test.
Cost and timing
Recast fees are usually a few hundred dollars and take a few weeks. Refinances take longer, require underwriting, and can include appraisal, title, and lender fees. For a refinance, divide closing costs by monthly savings to estimate break even months. Run both options before you move a large lump sum.
Recast compared with refinance
| Topic | Recast | Refinance |
|---|---|---|
| Same loan? | Yes | No. You get a new loan. |
| Interest rate | Stays the same | New market rate |
| Term | Stays the same | Often resets |
| Typical cost | A few hundred dollars | Thousands in closing costs |
| Credit check | Usually no | Yes |
| Removes PMI by itself? | No | Only if the new loan has no PMI or MIP |
Common questions
Related guides
Last updated: September 14, 2026