If you cannot refinance, why not recast?

With the wildly fluctuating mortgage market of late we've seen a boom in refinance applications. Rates change rapidly and the cost/benefit difference doesn't quite pay enough to jump fully into a refinance in a lot of cases for people who have bought in the last three years. One option that banks don't advertise a lot (because it actually costs them money in the long run) is the mortgage recast. In essence, if you have extra money (bonus or tax refund/rebate) and you are wary of the stock market, why not arrange to "pay down" your mortgage a little bit and then adjust your monthly payment off of the new mortgage amount.

For example:

$300,000 owed on a house - a 6% rate would have you paying roughly $1,800 a month. $1,500 of that would be interest to the bank.

Put $25,000 into a recast and the bank will adjust your principle and interest payment to $1650 a month.

You would turn your $25,000 in to a 30 year savings of $54,000. If you do this a few times over the life of the loan, or if you have a larger chunk to put down you can very quickly reduce your monthly payments.