How Much Does a Mortgage Recast Cost? Fees Explained
Quick answer: Recast fees are a flat charge, paid once. NerdWallet reports fees generally run $150 to $250; Bankrate reports $150 to $500. Published servicer fees run from none (Bank of America) to $700 (Trustmark): Citizens Bank lists $150; PennyMac, U.S. Bank, and the partner-lender documents from Newrez and Onity list $250; New American Funding lists $300; Gateway Mortgage lists $350; and Colonial Savings lists $500 or $650. Chase says only that fees may apply. Ask your servicer for the exact fee. The fee is rarely the deciding factor; the bigger question is whether to recast at all (vs. refinance or extra payments).
What you’re paying for
The recast fee covers the lender’s operational cost of:
- Reviewing your recast request and verifying eligibility
- Applying the lump sum to principal as a one-time event (separate from regular payment posting)
- Re-amortizing the loan and generating a new payment schedule
- Updating their internal systems and your account
- Sending you the new payment notice
It’s a flat fee, not a percentage. A $5,000 lump sum recast costs the same as an $80,000 lump sum recast.
There are no closing costs, appraisals, or third-party fees. That’s the whole point of recasting vs. refinancing.
Published fees and typical ranges
Most servicers don’t publish their recast fees. These do publish recast terms, either on their own sites or in documents for partner lenders (lenders that sell loans to the servicer). A partner-lender document isn’t written for borrowers, so confirm its terms with the servicer.
| Servicer | Fee | Minimum lump sum | Source |
|---|---|---|---|
| Bank of America | None (“There is no fee for a recast”) | $5,000 in principal paid in the last 6 months (or within 30 days after the request) | bankofamerica.com (borrower FAQ) |
| Chase | Not published (“Fees may apply”) | None (“there is no minimum amount required”) | chase.com (borrower page) |
| Citizens Bank | $150 processing fee | $5,000 | citizensbank.com (servicing fee page) |
| Colonial Savings | $500 (fixed rate) or $650 (adjustable rate) | $10,000 or 10% of the unpaid principal balance, whichever is greater | gocolonial.com (borrower terms and conditions, PDF) |
| Freedom Mortgage | Not stated | Not stated | freedommortgage.com (borrower education page) |
| Gateway Mortgage | $350, non-refundable | 10% of the current loan balance | gatewayfirst.com (borrower FAQ) |
| New American Funding | $300 | $5,000 | newamericanfunding.com (borrower guide, PDF) |
| Newrez | $250, subject to state rules | $5,000 | newrezcorrespondent.com (partner-lender document, June 2023, PDF) |
| Onity (formerly PHH) | $250, based on state rules | $5,000 (some investors require more) | onitymortgage.com (partner-lender document, March 2026, PDF) |
| PennyMac | $250 processing fee, sent with the lump sum | $10,000 | pennymac.com (borrower FAQ) |
| Trustmark | $700 (subject to change) | $10,000 | trustmark.com (borrower flyer and application, PDF) |
| U.S. Bank | $250 recast modification fee | Not stated | usbank.com (servicing fee schedule, PDF) |
| Wells Fargo | Not stated (recasts offered on new jumbo loans) | Not stated | wellsfargo.com (jumbo loan page) |
Chase, Colonial Savings, Freedom Mortgage, Gateway Mortgage, New American Funding, Onity, and Trustmark don’t recast Federal Housing Administration (FHA), Department of Veterans Affairs (VA), or U.S. Department of Agriculture (USDA) loans. Newrez’s document limits recasts to conventional Fannie Mae and Freddie Mac loans.
Had a Mr. Cooper loan? Mr. Cooper is now part of Rocket Mortgage, which services those loans under the same loan numbers. We couldn’t find Rocket’s recast terms published online; call (800) 4-ROCKET to ask.
For everyone else, the best guides are industry ranges:
- NerdWallet: recast fees generally run $150 to $250.
- Bankrate: fees typically run $150 to $500, and minimum lump sums are often $5,000 or $10,000.
These terms were last verified in October 2026. Your servicer (the company you send payments to, which may not be the lender you borrowed from) sets the actual fee, so confirm it before requesting a recast.
How the fee changes the math
Our rule of thumb: the recast fee should pay for itself in less than 12 months of monthly savings.
Example: $400K balance, 6.5%, 25 years remaining, $80K lump sum, $250 fee.
- Old monthly principal and interest payment: $2,701
- New monthly principal and interest payment: $2,161
- Monthly savings: $540
- Fee payback: $250 ÷ $540 = 0.46 months (less than 14 days)
In this scenario, the fee is trivial: it pays back in two weeks of the new payment schedule. Most recasts have similar dynamics.
When the fee math gets meaningful: small lump sum recasts. If you only have a $5,000 lump sum, the monthly payment drop is small (maybe $30/month) and a $500 fee may take 16+ months to recoup. At that point, just make the $5K extra payment without recasting.
Quick test before you pay any recast fee: divide the fee by your projected monthly savings. If the answer is less than 12, recasting is fine. If more than 12, just make the lump sum payment without recasting.
What if there’s no fee?
Not every servicer charges one. Bank of America says “There is no fee for a recast,” and Bankrate’s range applies “if your lender charges a recasting fee.” If yours doesn’t, check for any conditions, such as which loan types qualify, before you send the lump sum.
A free recast doesn’t change the underlying decision. Recasting still has to make sense compared to alternatives (extra payment, refinance). Free just removes one variable.
Hidden costs to watch for
Beyond the explicit fee, three hidden costs can show up:
Wire fees. Your servicer may ask you to send a large lump sum by wire transfer. Your bank may charge a fee to send it; ask your bank what it charges.
Tax escrow recalculation. If the new monthly payment changes your escrow setup (because the principal/interest portion changed), some lenders recalculate the escrow and may require a one-time escrow adjustment. It’s not really a “fee”; it’s just settling up.
Late fees during processing. If you accidentally underpay while the recast is processing because you assumed the new payment was already in effect, late fees compound. Don’t change your payment amount until you have the new amortization schedule in writing.
Negotiating the fee
Yes, you can sometimes negotiate the recast fee, especially if:
- You’re a long-term customer (5+ years with the lender)
- You’re applying a large lump sum (>$100K)
- You’ve had multiple loans or accounts with the bank
- You’re considering moving your business elsewhere
A polite, direct call to the loan servicing team works better than email. Ask: “I’m planning a recast. Is there any flexibility on the fee given my history with [bank]?” The worst case is they say no.
Fees vs. opportunity cost
The fee itself is rarely the most important number in the recast decision. What matters more:
- Is recasting better than just making the lump sum payment without recasting? (See our recast vs. extra payment comparison; usually no.)
- Is recasting better than refinancing? (Depends on rate environment, see our recast vs. refinance guide.)
- What’s your actual goal: lower monthly payment, or faster payoff? They’re different goals with different right answers.
Spending 30 minutes on these three questions is worth 1,000x the energy of debating a $250 fee.
FAQ
Is the recast fee tax deductible? Generally no. Recast fees are considered loan administration costs, not interest, so they’re not deductible. Consult a tax professional for your specific situation.
Can the fee be rolled into the loan? No. The recast fee is paid out-of-pocket, separate from the loan balance. This is different from refinancing where closing costs can sometimes be rolled in.
What if I recast multiple times? Each recast may carry its own fee. Ask your servicer whether there’s a limit on how often you can recast before paying for the first one, if you might want to recast again later.
Do FHA, VA, or USDA loans charge recast fees? Generally moot. These loan types typically don’t allow recasting at all. See which loans can be recast.
Sources: servicer documents linked in the table above, NerdWallet, Bankrate. Last verified October 2026. Verify current fees with your servicer before initiating a recast. RecastCalc is not a lender.
About the author: Ivan Stamenov is the founder of RecastCalc and operates Marcon Groupe LLC.