The Quick Read: A recast lets you send a large lump sum to your servicer and get a lower required monthly payment on the same loan. The rate, the term, and the payoff date stay put. Only the principal-and-interest payment is recalculated. Whether your jumbo loan can be recast depends on who owns it and who services it, and the lump sum alone does nothing until the servicer re-amortizes the loan.
Key takeaways
- A recast lowers your required payment. It does not shorten the loan or change the note.
- Sending cash without a recast request usually leaves the payment where it is.
- Jumbo servicers set their own rules on minimums, fees, timing, and frequency. Get them in writing.
- Reserve your tax bill and an emergency cushion before you send anything. A recast cannot be undone.
- If your goal is paying the loan off sooner, keeping the old payment often beats a recast.
Jumbo payment estimate
The starting figures are an example price in the jumbo range with ten percent down on a thirty-year fixed. Replace them with yours.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a jumbo loan quote.
Illustrative starting assumptions: a $1,000,000 price in the jumbo range, ten percent down on the top-leverage lane, a thirty-year fixed structure at the current Freddie Mac conforming benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conforming benchmark, a market reference and not a jumbo loan quote; jumbo rates are set by the lender and the lane at lock and differ from the conforming benchmark. An adjustable-rate scenario is shown at the benchmark for the whole term; the rate after the initial period is unknown. Reserve months and appraisal counts follow the lane sheet for the amount band; the automated finding may require more. Taxes, insurance and dues are editable estimates; closing costs are not included. On most lanes the conforming limit for the county decides whether a loan is jumbo at all; two lanes start at a stated dollar floor instead. Licensed in sixteen states for consumer mortgages.
What Does a Recast Actually Change?
A recast changes one thing: the monthly principal-and-interest payment. You make a big principal payment, and the servicer recalculates the payment over the time that remains. Your rate stays the same. Your maturity date stays the same. Your balance is simply lower, so the payment is lower.
Here is the clean math. Say you pay down 10% of your balance. With the rate and remaining term unchanged, the principal-and-interest payment falls by about 10% too. Pay down 20%, and it falls by about 20%. The payment scales with the balance. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Taxes, homeowners insurance, and any HOA dues do not shrink. Those are separate from principal and interest.
That is why this move suits people with lumpy pay. Picture a borrower with a large jumbo balance who gets a vest or a bonus once or twice a year. The base salary has to carry the monthly payment. A recast lets the windfall lower that monthly burden without a new loan, a new appraisal, or a new round of paperwork on variable income. (Check that last claim with your servicer. Practices differ.)
If you are still shopping for the loan itself, Lendmire’s jumbo loan programs cover the fixed, adjustable, and interest-only structures, and the structure you pick matters later when you ask about a recast.
Key Terms Defined
Recast (re-amortization): a recalculation of your payment after a large principal payment, using the lower balance and the same remaining term.
Principal curtailment: an extra payment applied only to the loan balance, not to interest or escrow.
Servicer: the company that collects your payments and handles your account. It may differ from the lender that originated your loan.
Investor: the entity that owns your loan. On a jumbo, that is often the bank itself or a private buyer, not a government-sponsored agency.
Supplemental wages: bonuses, commissions, and similar pay that employers withhold on differently from regular salary.
Seasoning: the waiting period after closing before a servicer allows a recast.
From Vest Date to New Payment: The Timeline
Most guides treat vesting as one bullet in a list of windfalls. The order of operations is where borrowers slip. Here is the sequence that works.
1. Vest or bonus lands. Shares are delivered or cash is paid. The amount you see is the gross figure, not what you keep.
2. Employer withholding happens. Some shares may be withheld to cover tax. What remains is your net.
3. Decide whether to sell. A recast needs cash. If you hold shares, you must sell some to produce it, and the sale can trigger its own tax.
4. Set aside the tax reserve. Do this before any money moves toward the loan.
5. Confirm eligibility in writing. Ask the servicer before wiring anything.
6. Send the lump sum labeled as principal-only. Follow the servicer’s instructions for how.
7. Submit the recast request. The paydown and the request are two separate acts.
8. Sign the re-amortization paperwork. Check the new payment figure against your own math.
9. Watch the first new payment. Confirm the effective date and whether your escrow changed.
Between steps 7 and 9, you may still owe the old payment. Ask the servicer what to pay until the new schedule posts. Skipping a payment because you “already sent a lot” is how a current loan turns late.
How Much of the Vest Is Free Cash?
Less than you think. Employers generally withhold on bonuses and vested stock at a flat supplemental rate, as the IRS employer guide describes for supplemental wages. Withholding is not the same as the tax you will owe. Your final bill can land higher or lower.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Beyond tax, think in three buckets before you send anything:
- Tax reserve: what you expect to owe on the vest, the bonus, and any share sale.
- Liquidity cushion: emergency cash outside the house. Money sent to the servicer is no longer yours to spend.
- Concentration risk: if the stock drops after you commit the cash, you cannot reverse the recast.
Only what is left over is recast money. A recast feels like a clean win until a tax bill arrives and the cash is already in the loan.
Can Your Jumbo Be Recast? How to Find Out
Often yes, but there is no single rule. No federal rule governs jumbo recasts. The decision sits with the investor and the servicer.
Fannie Mae’s guide gives the clearest public description of the mechanics. In its Selling Guide, a re-amortized loan follows a borrower’s principal curtailment, with the payment recalculated over the remaining term. The guide treats that as a payment change only. That text covers loans Fannie Mae buys, so it is a template, not a jumbo rule. Your servicer may follow something similar or something quite different.
For loans it owns, Fannie Mae’s Servicing Guide requires servicers to accept a principal payment that the borrower identifies as such on a current loan. A separate step handles the re-amortization. Another section of the same guide says that after a substantial curtailment the servicer “may” agree to reduce the payment. May means permitted, not owed.
Your five-minute checklist
Call or message your servicer and ask:
- Who owns my loan, and do you offer recasts on this product?
- Is there a minimum principal payment?
- Is there a fee?
- How long after closing must I wait (seasoning)?
- How often can I recast?
- Must the loan be current?
- Which rate applies to the recalculation? (Servicer terms differ, so confirm it is your note rate.)
- Will I receive the new payment in writing before I send the money?
Servicing can be sold after closing, so ask the current servicer, not the lender that originated the loan. Some large banks publicly offer a jumbo recast with a stated minimum. Others do not. Do not assume yours matches.
Recast, Refinance, Extra Payment, or Keep the Cash?
The right tool depends on your goal. Here is how the four options compare.
| Option | Payment | Note terms | Best fit |
|---|---|---|---|
| Recast | Drops | Unchanged | Lower monthly burden |
| Refinance | Can drop | New loan | New rate, term, or product |
| Extra payment, no recast | Stays | Unchanged | Faster payoff, more interest saved |
| Keep the cash | Stays | Unchanged | Liquidity, other goals |
Two trade-offs deserve plain words. First, a recast keeps the loan running to the same end date and leaves the note terms unchanged. Paying down principal while keeping the old payment typically saves more total interest. You pick between a recast and putting the extra money toward faster payoff.
Second, a refinance is a full new loan. A lender reviews income, credit, assets, and the home again. For someone whose pay is mostly equity compensation, that review can be the hard part. A recast sidesteps it at servicers that do not re-underwrite. Across the wholesale jumbo programs Lendmire places files with, the review of a new loan is shaped by the lane: a 660 decision score on the headline lane, leverage up to 90%, loans up to $5,000,000, and a 50% ratio ceiling on the fixed lanes (45% on the adjustable lanes and 43% on the interest-only lanes). Reserves and appraisal requirements scale with the loan amount. All of that is subject to lender guidelines and full file review.
Choose a refinance, not a recast, when you want a new rate, a new term, a different product, or to get out of an adjustable loan. A recast changes none of those.
Where the General Rule Breaks
Government loans. FHA, VA, and USDA loans are generally not eligible for a recast. Those loans are rarely jumbo anyway.
Delinquent loans. A recast generally needs a current loan. Extra principal on a late account goes first to curing the delinquency.
Adjustable-rate and interest-only jumbos. Policies vary, and public rules are thin. Ask your servicer how a recast interacts with a reset or with the end of an interest-only period.
Prepayment penalties. The CFPB says these do not normally apply to small extra payments and advises checking with your lender. A large lump sum is exactly the case to verify. Read your note and Closing Disclosure.
Second homes. This article covers primary residences. If the home is a second home, occupancy affects the leverage a lane allows, so confirm the specifics with your servicer.
Escrow. Escrow changes and the effective payment date come from the servicer. Ask, because public guidance is thin.
Common Mistakes to Avoid
- Sending the money with no recast request. The paydown alone may not re-amortize the loan. Servicers commonly want a separate request.
- Skipping the written terms. Get the minimum, fee, and frequency before moving cash.
- Not labeling the payment principal-only. Unlabeled money may be applied elsewhere.
- Ignoring the old payment. Keep paying until the new schedule is confirmed.
- Recasting with the tax bill unfunded. Reserve first.
- Assuming a lower payment is higher income. A future lender looks at your debt-to-income using the payment you actually carry. A lower payment helps, but it does not replace documented income.
Should You Recast Every Vest?
Probably not, unless your servicer allows it and your goal justifies it. Many servicers limit how often you can recast, and some charge a fee each time. If your vests come in small pieces, one larger recast later may beat several small ones. Hold the cash in the meantime, keep making the full payment, and recast when the pile is big enough to matter.
This one is a genuine toss-up. A single big recast keeps your options open longer. Frequent recasts lower your payment sooner. Pick based on how much liquidity you want to hold.
Planning a Purchase With a Recast in Mind
Some buyers plan this from day one. They use higher leverage at purchase, up to 90% on the headline jumbo lane, subject to lender guidelines, keep cash liquid, and then recast after a vest. That works only if the servicer permits it, and a purchase lane’s leverage and reserves still have to fit your file. The tradeoff is a larger loan balance in the meantime.
Ask any servicer about recast terms before you sign, not after. Servicing rights can change hands, so treat a promise at closing as a starting point.
Next Steps
If you already hold a jumbo loan and are weighing a recast against a refinance, or you are buying a home and want to plan for a recast from the start, Lendmire can help you compare the options and what each one asks of the file.
Frequently Asked Questions
Can a jumbo mortgage really be recast?
Often, but it depends on the servicer and the investor that owns the loan. No federal rule requires it. Some large banks publicly offer a jumbo recast, and others do not. Ask for the terms in writing.
Does a recast need an appraisal or a credit check?
Typically not at servicers that offer it. You were qualified on the original note amount, so a recast generally does not re-test credit or income. The flip side is that it cannot repair a change in your income or credit either.
Will a recast shorten my loan or change my rate?
No. The note terms stay the same except the payment. If you want a shorter term or a new rate, you are looking at a refinance, which is a new loan with its own review.
Is a recast better than just paying down the loan?
It depends on your goal. A recast lowers your required payment. Keeping the old payment after a paydown usually saves more total interest and pays the loan off sooner. If you want cash-flow relief, recast. If you want the biggest interest savings, keep the payment.
What if my loan has a prepayment penalty?
Read the note and your Closing Disclosure before sending a lump sum. Penalties do not normally apply to small extra payments, but a large paydown is the case to verify. Your servicer can confirm what applies.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging FHA, VA, conventional and jumbo purchase and refinance loans through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. Fannie Mae Selling Guide B2-1.5-02, Loan Eligibility
3. Fannie Mae Servicing Guide C-1.2-01, Processing Additional Principal Payments
4. Fannie Mae Servicing Guide F-1-09, Processing Mortgage Loan Payments and Payoffs
5. CFPB, What Is a Prepayment Penalty?
This article is part of Lendmire’s jumbo loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Use a Brokerage Account to Get a Jumbo Loan in Early Retirement · 15-Year vs. 30-Year Jumbo for a High-Earning W-2 Buyer · How to Remove a Co-Borrower From a Jumbo Loan on W-2 Income
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.