A recast keeps your rate and payoff date but lowers your monthly payment after a big principal paydown. There is no universal minimum, but small paydowns rarely make the cut. With a recast, you make a large lump-sum payment against principal and ask the servicer to re-amortize the remaining balance over the loan's remaining term. The rate and payoff date stay put, and the payment drops because the balance is now lower. Paying extra without a recast does the opposite: the payment stays the same and the loan simply pays off sooner. No rule sets a minimum, so call your servicer and confirm two things: whether they will approve a recast for your paydown amount, and what they charge (usually a small processing fee). In practice, servicers do not want the paperwork on a $5,000 or $10,000 paydown. A recast tends to make sense in the $25,000 to $50,000-plus range. Refinancing a small balance is a different problem. Once a loan is well under $100,000, the fixed closing costs (appraisal, escrow, title, recording) eat a big share of the loan. A rough rule of thumb we use: divide about $125,000 by the loan amount to gauge the rate improvement you would need. On a $50,000 balance, that implies roughly a 2.25% to 2.5% rate drop before a refinance is worth it, because there is so little total interest at stake. Recast to lower the payment on a balance you are keeping. Refinance when the rate math clears that bar.