Three options, one decision
Refinance when a new rate beats your current one past the break-even. Recast when you have a lump sum and want a lower payment while keeping your rate. Hold when your current rate is low and no move clears its costs.
If you’ve got a low first-mortgage rate, refinancing to tap equity can be costly — a HELOC or home equity loan may serve better. If you just want a lower payment and have cash, a recast keeps your rate and re-amortizes the balance.
Run your numbers
The right move depends on your current rate, your goal, and the math. We’ll compare refinance break-even, a recast, and holding — and tell you honestly which wins.
Understanding a recast
A recast is an underused option worth knowing. You make a large lump-sum payment toward principal, and the lender re-amortizes your loan over the remaining term — lowering your monthly payment while keeping your existing interest rate. It’s ideal when you’ve come into cash (a bonus, a sale, an inheritance) and want a lower payment without giving up a low rate or paying refinance closing costs. Not every loan allows recasting, and it doesn’t shorten your term, but when it fits, it’s often cheaper and simpler than a refinance.
Choosing between the three
Line the options up against your goal. Refinance when a new rate beats your current one enough to clear the break-even, or when you want to change loan type or term. Recast when you have a lump sum, want a lower payment, and love your current rate. Hold when your rate is already low and no move recoups its cost — doing nothing is sometimes the smartest play. We run the numbers on all three so the decision is grounded in math, not guesswork.
Frequently asked questions
What is a recast?
You pay a lump sum toward principal and the lender re-amortizes the loan for a lower payment — keeping your existing rate.
Does a recast change my interest rate?
No — a recast keeps your existing rate and simply lowers the payment by re-amortizing after a lump-sum principal payment. That’s its main advantage over refinancing.
How do I decide between refinancing and recasting?
If you want a lower payment but have a low rate and some cash, recast. If a new lower rate clears your break-even, refinance. We’ll compare both for your numbers.
Should I refinance if my rate is low?
Often no — a HELOC or home equity loan can meet cash needs while preserving your low rate. We’ll prove the math.
How do I decide?
Compare the break-even of each option against your goal. We’ll run all three for you.
Save Financial, Inc. — NMLS #377740, DRE #01875766. Equal Housing Opportunity. Figures are illustrative for 2026 and not an offer of credit or a guarantee of rates or approval.