Recast Mortgage Calculator 15 Year

Refinancing your mortgage to a 15-year term can significantly reduce your monthly payments, but it also means you'll pay more in interest over the life of the loan. Use this calculator to compare your current mortgage payments with what you'd pay on a 15-year recast mortgage.

How the 15-Year Recast Mortgage Calculator Works

A 15-year recast mortgage is a refinancing option that allows you to extend your mortgage term to 15 years while keeping the same interest rate. This typically results in lower monthly payments but higher total interest costs compared to a 30-year mortgage.

Key Features of a 15-Year Recast Mortgage

Shorter loan term (15 years instead of 30)
Lower monthly payments
Higher total interest paid over the life of the loan
Potential tax benefits if you itemize deductions
Opportunity to pay off the mortgage early

Important Consideration

While a 15-year recast mortgage can lower your monthly payments, it's important to consider your financial situation and long-term goals. The higher total interest cost means you'll pay more over the life of the loan, which could impact your ability to save for retirement or other financial goals.

When to Consider a 15-Year Recast Mortgage

You might want to consider a 15-year recast mortgage if:

You expect to sell your home within 15 years
You want to free up cash flow for other expenses
You're in a low-interest-rate environment
You can afford to pay more in interest over the life of the loan

Potential Drawbacks

Before refinancing to a 15-year term, consider these potential drawbacks:

Higher total interest payments
Less time to build equity in your home
Potential for higher monthly payments if interest rates rise
Risk of negative equity if home values decline

The Formula Used

The calculator uses the standard mortgage payment formula to calculate your monthly payments:

Mortgage Payment Formula

Monthly Payment = P × [r(1 + r)^n] / [(1 + r)^n - 1]

Where:

P = Principal loan amount
r = Monthly interest rate (annual rate divided by 12)
n = Number of payments (loan term in years × 12)

The calculator also calculates the total interest paid over the life of the loan by comparing the total payments to the original loan amount.

Assumptions

The calculator makes the following assumptions:

Fixed interest rate for the life of the loan
No prepayment penalties
No additional closing costs
No changes in property taxes or insurance

Worked Example

Let's look at an example to see how a 15-year recast mortgage compares to a 30-year mortgage.

Example Scenario

Home price: $300,000
Down payment: 20% ($60,000)
Loan amount: $240,000
Interest rate: 5% (0.4167% monthly)

30-Year Mortgage

Monthly payment: $1,201.64

Total payments: $432,550.40

Total interest: $192,550.40

15-Year Recast Mortgage

Monthly payment: $1,922.83

Total payments: $348,877.20

Total interest: $108,877.20

Comparison

In this example, the 15-year recast mortgage has a higher monthly payment ($1,922.83 vs. $1,201.64) but pays off the loan in half the time. The total interest paid is significantly lower ($108,877.20 vs. $192,550.40), which could be beneficial if you plan to sell the home within 15 years.

Comparison Table

Term	Monthly Payment	Total Payments	Total Interest
30 Years	$1,201.64	$432,550.40	$192,550.40
15 Years	$1,922.83	$348,877.20	$108,877.20

Frequently Asked Questions

What is a recast mortgage?

A recast mortgage is a refinancing option that allows you to extend your mortgage term while keeping the same interest rate. This typically results in lower monthly payments but higher total interest costs compared to your original loan.

How does a 15-year recast mortgage compare to a 30-year mortgage?

A 15-year recast mortgage typically has higher monthly payments than a 30-year mortgage but pays off the loan in half the time. The total interest paid is significantly lower, which could be beneficial if you plan to sell the home within 15 years.

Are there any closing costs for a recast mortgage?

Yes, there are typically closing costs associated with refinancing, including appraisal fees, title insurance, and origination fees. These costs can vary depending on your lender and loan program.

Can I prepay my recast mortgage early?

Yes, you can prepay your recast mortgage early without penalty, as long as you have the funds available. Prepaying can help you save on interest and pay off your loan faster.

What happens if interest rates rise after I refinance to a 15-year term?

If interest rates rise after you refinance to a 15-year term, your monthly payments will increase. This is because the interest rate is typically locked in for the life of the loan, so any rate increases would not apply to your existing mortgage.