The fee is small and predictable. The requirements are where people get caught — especially the rule about requesting the recast before you send the money.
Do this first: Call your servicer and request the recast before making the lump-sum payment. Several servicers require a signed request form first, and a payment sent early may simply be applied to principal with no recast.
Most servicers charge a one-time processing fee between $150 and $500. Around $250 is common. Some waive it entirely; a few charge more. This covers the re-amortization calculation and the new payment schedule — there are no closing costs, title fees, or points, because no new loan is created.
Compared with a refinance, which runs 2% to 5% of the loan amount, the recast fee is close to a rounding error. It should not be the deciding factor.
Most servicers set a floor of $5,000 to $10,000. Some require more. A handful have no minimum at all, which helps if you have been making extra payments over time and now want the payment recalculated.
There is often a ceiling too — commonly around 85% of the unpaid principal balance — because a recast is not designed to nearly pay off the loan.
| Requirement | Typical rule |
|---|---|
| Loan type | Conventional conforming, backed by Fannie Mae or Freddie Mac |
| Lien position | First liens only; second mortgages and HELOCs are not eligible |
| Payment history | Loan must be current, usually with a clean recent record |
| Minimum lump sum | $5,000–$10,000, set by the servicer |
| Seasoning | Some servicers require 30–90 days after origination |
| Frequency | Some investors permit only one recast per 12 months |
| Fee | $150–$500, usually due before processing |
Loans above the conforming limit are held in the lender's own portfolio, so the decision is entirely theirs. Some portfolio lenders recast readily; others do not offer it. There is no general rule — you have to ask.
Write down the answers and the name of the person you spoke to. Recasting is not something every front-line representative handles often, and answers sometimes vary within the same company.
The most common failure is sequence. You send $50,000, the servicer applies it to principal, and then tells you the recast request had to come first. The money is not lost — your balance is genuinely smaller — but your payment does not change, and some servicers will not recast retroactively.
The second is escrow confusion. A recast changes the principal and interest portion of your payment. Taxes and insurance are unaffected, so your total monthly bill will not drop by the full amount the calculator shows.
See what your payment would become
Compare recasting against paying down without one, before you call your servicer.