Mortgage Recast Fees by Lender: What the Big Servicers Charge

The fee landscape: $150 to $500, flat

Unlike a refinance, where closing costs run 2 to 5% of the loan, a recast is a flat administrative fee. It covers the servicer's paperwork and the manual re-amortization of your schedule. There is no appraisal, no credit check, and no underwriting, which is why the number is in the hundreds, not the thousands.

Here is what the big servicers are reported to charge. Treat these as starting points, because fees change and your specific loan may differ. Call your servicer to confirm before you plan around a number.

Figures compiled from servicer disclosures and borrower reports, 2025 to 2026. Minimums and fees vary by loan and change over time. Confirm directly with your servicer.

The minimum lump sum matters more than the fee

Everyone focuses on the $150 to $500 fee. The real gate is the minimum lump sum, because most servicers will not process a recast for a small payment. The common range is $5,000 to $10,000, but it varies widely:

• $5,000 to $10,000 is the typical floor at most large servicers.
• $10,000 or more is required by some servicers, often counted as extra principal paid since closing rather than a single payment.
• Wells Fargo is reported to require $20,000 in extra principal before it will recast, which is unusually high. If your servicer has a steep minimum, the recast may not be practical for a modest lump sum.

One question that catches people: does extra principal you already paid count toward the minimum? At some servicers, yes. If you have been prepaying for two years, you may already be over the threshold without knowing it. Ask.

Eligibility: the rules that disqualify loans

The fee and minimum do not matter if your loan cannot be recast. The standard requirements:

• Conventional loans only. FHA, VA, and USDA loans generally cannot be recast under federal servicing rules. This is the single biggest disqualifier. If you have a government-backed loan, your options are extra principal payments (which work on any loan) or refinancing.
• First lien position. The mortgage being recast must be the primary loan on the property.
• Current on payments. No past-due payments. Some servicers also require no 30-day late payments in the past 12 months and no 60-day lates in the past 24 months.
• Seasoning. Some servicers require the loan to be open for a minimum period, often 2 to 3 months.
• Servicer participation is optional. Recasting is not a right; servicers choose to offer it. If yours does not, they do not have to.

The FHA and VA exclusion surprises a lot of people, because those borrowers are often the ones who most need payment relief. The reason is structural: government loan programs have their own loss-mitigation frameworks, and principal-reduction recalculation is not part of them.

The four questions to ask your servicer

Before you send a dollar, get these four answers in writing. Servicer phone reps give different answers on different days; a written confirmation protects you.

1. Do you offer a recast on my specific loan? Not "do you offer recasts generally." Your loan, your account number.
2. What is the minimum lump sum? And does extra principal I have already paid count toward it?
3. What is the fee, and how is it paid? Some servicers deduct it from the lump sum; others bill it separately. Make sure the fee does not eat into your principal reduction.
4. How long until the new payment takes effect? Typical is 45 to 60 days from receipt of the lump sum and fee. If you are timing this around a bonus or a sale, the lag matters.

Also ask whether the recast affects your PMI. If the lump sum pushes your loan-to-value ratio to 80% or below, the recast may be your moment to request PMI removal too, which can save more per month than the recast itself.

Is the fee worth it? The break-even test

The fee is tiny relative to the savings, which is why recasts are usually a good deal when they are available. The test: fee divided by monthly savings equals break-even months.

Example: a $250 fee that saves you $200 per month breaks even in 1.25 months. Even a $500 fee against $100 of monthly savings breaks even in 5 months. Compare that to a refinance, where $6,000 of closing costs against $200 of monthly savings takes 30 months to break even. The recast wins the break-even contest almost every time.

The real comparison is not fee versus savings, it is recast versus the alternatives. If your goal is the lowest payment, the recast usually beats refinancing on cost. If your goal is maximum interest savings, an extra principal payment without a recast beats the recast. That tradeoff is worth understanding before you choose.