Recast if your current rate is worth keeping and you have a lump sum ready. Refinance only when a new rate beats yours by enough to earn back the closing costs. They solve different problems. A recast keeps your existing loan, rate, and remaining term. You put a lump sum toward principal, the servicer re-amortizes the smaller balance, and your monthly payment drops, usually for a small fee. The rate never changes, which makes a recast the clear winner when you already have a rate you would hate to give up. A refinance replaces the loan entirely (new rate, new term, full closing costs) and only makes sense when the improvement pays those costs back within a reasonable window. One eligibility check to make early: recasting is a conventional-loan feature. Fannie Mae and Freddie Mac loans allow re-amortization after a substantial principal paydown, though the servicer is not obligated to offer it, so ask yours directly. FHA, VA, and USDA loans do not offer recasts. The deciding questions: - Is your current rate one you would happily keep? - Do you have cash you are comfortable putting into the house? (Money in the walls is hard and expensive to get back out, so keep your reserves intact.) - If you refinanced, how long until the savings cover the closing costs? If the rate is attractive and the lump sum is truly spare, recast now. If your rate is high and a refinance pencils today, do that. What we would not do is pick the worse option today on the assumption you will refinance later; nobody can promise where rates go. We are glad to run both scenarios side by side in the free Roadmap conversation, about 20 minutes with your real numbers.