Mortgage recast calculator

Recasts a mortgage by subtracting lump_sum from the balance and re-amortizing over the same months_remaining at the unchanged annual_rate, returning payment_before, payment_after, payment_delta, payment_delta_percent and total interest_saved.

Recast versus refinance

Because the term is held constant, the monthly relief is proportional to the fraction of principal paid down. A recast, unlike a refinance, keeps your interest rate and remaining term intact and simply re-amortizes a smaller principal after a one-time lump_sum. new_principal equals balance minus lump_sum, and both the old and new payments use the annuity formula payment = P·i·(1+i)^n / ((1+i)^n − 1) with i = annual_rate/1200 and n = months_remaining. On a $200,000 balance at 4% with 240 months left, a $20,000 lump sum drops the payment from $1,211.96 to $1,090.76—a payment_delta of $121.20, or payment_delta_percent of 10.00. When annual_rate rounds to zero the formula degrades to principal divided by months, so an interest-free loan still returns sane figures instead of dividing by zero.

Interest saved and the output fields

Beyond the lower installment, the tool totals lifetime interest for both scenarios. interest_before equals payment_before times months_remaining minus the original balance, and interest_after applies the same identity to new_principal, so interest_saved is their difference—$90,870.56 minus $81,783.50 gives $9,087.06 on the sample loan. All thirteen output fields, from new_principal through interest_saved, are rounded once with a half-up rule at the decimals parameter, which defaults to 2. payment_delta is payment_before minus payment_after, and payment_delta_percent expresses that as a share of the original payment; both are derived from unrounded intermediates so the percentage and the dollar figures stay internally consistent rather than drifting a cent apart when displayed.

Validation and safe integration

balance must be a finite number above zero, annual_rate zero or more, and months_remaining a positive integer; each failure returns a typed invalid_input error naming the field. The critical guard is lump_sum: it defaults to 0 and must be at least zero and strictly less than balance—you cannot recast by paying the loan off entirely—otherwise you get invalid_input rather than a nonsensical zero payment. That makes the endpoint safe to expose behind a servicing portal where borrowers type arbitrary amounts. Failed tasks are never billed, and prepaid balance is spent only on successful API calls at the published base price, which keeps bulk what-if analysis cheap to run.