A refinance and a recast solve two different problems, and you can use one, the other, or both. - A refinance replaces your current loan with a new one. That's how you capture a lower prevailing rate, and it resets the term unless you ask for a custom term that matches your remaining years. - A recast keeps your existing loan and rate exactly as they are. You make a lump-sum payment toward principal, and the servicer re-amortizes the payment over the remaining term against the new, lower balance. Lower monthly payment, same rate, usually a small servicer fee, often with no appraisal or full underwrite. So if your goal is a lower rate, that's a refinance. If your goal is a lower payment on a loan you're otherwise happy with, a recast can do that cheaply. You can even do both at different times: refinance when the numbers work, then recast later if you come into a lump sum you want to put toward principal. One honest caveat on waiting for rates to drop: nobody can promise where rates go, so we wouldn't hang the decision on a rate move that may never happen. Decide based on what improves your situation with the numbers you can see now, and treat a future refinance as a bonus, never the plan.