Mortgage Recast Fees and Requirements

There is no single rule for recasting. Each servicer sets its own fee, minimum, and process, within what the loan's investor allows. Here is what two lenders publish, the typical ranges elsewhere, and what to ask yours before you send any money.

New to the idea? Start with what a mortgage recast is.

What two lenders publish

Most lenders do not post their recast terms, so most numbers online are second-hand. These two come from the lenders themselves.

The difference matters: a borrower with $3,000 to put down may be turned away by one servicer and accepted by another, so check yours rather than relying on a general number.

Typical recast fees

Consumer finance sites commonly report recast fees of about $150 to $500, with $250 a frequent figure. Treat that as a range, not a price quote. A recast fee is a flat charge for re-amortizing your loan, which is why it is far lower than the closing costs of a refinance, often 2% to 6% of the loan.

Is the fee worth it?

Divide the fee by the monthly payment drop to see how fast it pays for itself. On a $250,000 loan at 6% with 25 years left, with a $250 fee:

The fee itself is small. The bigger question is whether a lower payment is what you want. Keeping your old payment would save much more interest; see the mortgage recast calculator.

Minimum lump sum

Many consumer guides cite $5,000 to $10,000 as the usual minimum, and Onity's $5,000 sits at the low end of that. Chase says it has no minimum. Some servicers let several smaller payments count toward the total within a window, but this varies, so ask. Even where the minimum is low, the payment only falls in proportion to the share of the balance you pay down.

Eligibility checklist

• Conventional loans owned by Fannie Mae or Freddie Mac are the usual candidates. Check ownership with the Fannie Mae or Freddie Mac lookup tools, or ask your servicer.
• FHA, VA, and USDA loans are excluded by both lenders above. See the FHA, VA, and USDA guide.
• Payments up to date. Both lenders require the loan to be current or in good standing.
• Not in an interest-only period, and not a negatively amortizing ARM, at Onity.
• The investor allows it. Both lenders say availability depends on investor guidelines.

Timeline: what to expect

Onity's published process is a useful model: the borrower makes the principal payment and asks for the recast; the servicer mails an agreement within 10 business days; the borrower has 30 days to sign it and return it with the fee; the new payment starts within 10 business days of receiving it. In that example, expect roughly one to three months from request to new payment. Your servicer may be faster or slower.

Some servicers require the request within a set window after the lump sum, and Onity's is 180 days (45 for certain investors). Do not let the payment sit without asking.

What to ask your servicer

1. Does my loan type and investor allow a recast?
2. What is the minimum lump sum, and can several payments count toward it?
3. What is the fee, and when and how is it paid?
4. Is there a deadline between the lump-sum payment and my request?
5. How is the payment applied, and how do I make sure it goes to principal?
6. How long until my new payment starts, and what do I pay in the meantime?
7. Does anything else change, such as escrow or the payment due date?
8. Can I recast again later if I make another lump-sum payment?

Get the answers in writing before sending money.

Chase mortgage recast

If your loan is serviced by Chase, its recast page says there is no minimum amount, the loan must be in good standing, FHA, VA, and USDA loans are excluded, and fees may apply. It tells borrowers to contact Chase to review their options. It does not publish a fee or timeline, so ask for both before you pay.