Can You Pay Your Mortgage With a Credit Card?

Introduction

So you bought a house, you’re living the dream, and it’s time to make your next mortgage payment. The question is, can you use a credit card to do that?

It’s kind of like asking whether you can pay bills with a credit card. In some cases, the answer is absolutely yes. But in other cases — like loans, taxes, rent and mortgages — it’s much more complicated.

Depending on the lender, it might be a simple transaction. But it’s likely that you’ll have to pay an additional fee, and maybe even jump through a few hoops to use a workaround. In most cases, you would want to treat this as a one-off temporary solution rather than your regular payment method.

Let’s take a look at how it could work, what your various options would be, the pros and cons of each, and what you need to consider before pulling the trigger.

How To Pay Your Mortgage With a Credit Card

There’s a chance that both your mortgage lender and credit card issuer will let you pay an installment using your credit card. But most mortgage companies don’t accept credit cards, and many creditors don’t approve mortgage transactions. This is referred to as a debt-for-debt payment because it’s literally just turning one debt into another.

Lenders generally don’t like this type of arrangement, so the direct approach is pretty unlikely. But if you do get the green light from both parties, chances are you’ll face a pretty hefty transaction fee for the privilege of paying with plastic.

And don’t forget the interest fees on your credit card if you don’t pay it off right away. Let’s be honest … if you could pay it off right away, you probably wouldn’t be asking about using your credit card, right? You’d just pay your mortgage from your bank (unless you’re hoping for credit card rewards, but we’ll talk about that later).

Of course, you’d need a credit card with enough available credit to make that payment, plus extra wiggle room to avoid maxing out your card. And if you care about your credit score, you don’t want to charge more than 30% of your credit line, or your credit utilization ratio will be creeping too high.

The average mortgage payment is around $2,200, according to the National Association of Realtors. On that amount, a 3% transaction fee would be $66 and a 29% annual percentage rate (APR) would cost over $53 per month. That’s an extra $119 right there, and we’re just getting started. Don’t forget that you already have an APR on your mortgage as well, so you’d be paying interest twice.

If paying directly with your card isn’t an option, you have a few workarounds you could consider instead.

Third-party payment service

Financial apps and platforms like Plastiq, Bill, or Online Check Writer can act as your middleman. You pay them the bill amount with your credit card, and they send a check or electronic payment on your behalf. The mortgage lender is happy because you paid with an acceptable method, and your credit card company is happy because you purchased from an acceptable vendor.

However — yup, you guessed it — you’re going to have to pay a fee for this service. In fact, you’ll probably pay both a transaction fee on the card payment and a delivery fee to send out the check or transfer. There may be membership costs as well, depending on the platform’s business model.

Also, some third-party payment services only accept cards on certain networks for mortgage payments, so it depends which type of card you have. And some creditors will charge these transactions as a cash advance, which typically has no grace period and a higher interest rate than purchases.

Cash advance option

If you want to skip the third-party platform, you could just get a cash advance. But you’ll still face that potentially higher APR, plus any cash advance fees.

And once you have cash in hand, what do you do with it? If your mortgage lender is local and accepts cash for monthly payments, you can take it directly to them. If not, you’ll have to turn the cash into something else.

You could take it to your bank and get a wire transfer. You could also buy a money order or cashier’s check with the cash, and then use that to pay your mortgage. Or you can load up a prepaid debit card and use that for a debit payment to your mortgage company. Of course, these all come with their own costs and fees too.

If your creditor offers convenience checks, or check cash advances, you could also use one of those to pay directly from your credit card. This has the benefit of skipping the middle step — cashing out and then changing it into something else. Of course, the check would need to accommodate the full mortgage payment. And since they usually count as cash advances, you should understand what the fees and APR will be before using one.

Balance transfer strategy

You can’t just transfer your balance from a mortgage to a credit card. However, you could use a balance transfer check from your creditor, which is similar to a convenience check but charged as a balance transfer instead of a cash advance.

Again, you would need to make sure the check offered a high enough amount to cover the mortgage payment. And there’s usually a balance transfer fee, which generally ranges from 2% to 5%. The APR here is also likely different from your standard purchases, but balance transfer APRs may be lower promotional rates instead of the higher APRs that usually come with cash advances.

If you luck out with a 0% APR offer on a balance transfer check, this could possibly be a good move. But these types of offers are typically only for a limited time, so you would have to pay off the entire amount before the promotional period ends.

Is It Possible To Pay a Mortgage by Credit Card Without a Fee?

You probably won’t be able to do this without paying someone a fee — and most likely more than one fee to more than one party. Nobody really offers financial services for free.

If the stars align and you find fees waived on every step of the process, that’s awesome. But then get your camera ready so you can snap a photo of those pigs flying over your head.

Best Credit Cards for Paying a Mortgage

If you’d like to try paying your mortgage on credit, you have a few credit card options that could potentially work out.

Credit card with a 0% APR

A credit card with a 0% APR would be one of the best options for paying your mortgage, either directly or through a third-party service. Between transaction fees and stacked APRs, any other type of card would likely leave you in the red if you can’t pay off the whole thing that month.

So a 0% APR, even if only a promotional rate for a limited time, is the only way you could carry a balance without losing money. That is, as long as you pay off the balance before the promotional period ends without missing any payments along the way.

Credit card with a sign-up bonus

Another scenario that could be worth it is a new card that comes with a generous sign-up bonus, like extra points or cash back rewards if you spend a certain amount within the first few months of opening a card.

For example, if you got an introductory bonus of $200 in cash back rewards for spending $1,000 during the first three months, you could potentially still make a profit after paying the transaction fees.

Credit card with rewards

If your card doesn’t have either of these perks, your options are more limited. Assuming you can pay it off immediately, the only real benefit would be to earn rewards on your credit card transaction. If that’s your goal, the points or cash back rewards would have to clock in at more than 3% minimum, because most of these methods will cost you at least a 3% transaction fee.

So the type of card that could make sense here would be one that earns more than 3% rewards on all purchases. None of these strategies are likely to fit into a specific elevated rewards category, unless a payment platform happens to use an “online shopping” merchant category code, and that category happens to earn a higher level of cash back. Otherwise, you have to look at the general reward levels.

Keep in mind that cash advances and balance transfers probably don’t earn any type of rewards at all. So if you’re choosing those methods, don’t do it for the credit card rewards.

Pros and Cons of Paying a Mortgage With a Credit Card

There could be both benefits and drawbacks to paying your mortgage with a credit card, and the end result will depend on your personal situation. Some people may find the pros outweigh the cons, and others will experience the opposite.

Pros of paying a mortgage with a credit card

• Potential for earning credit card rewards

• Opportunity to fulfill welcome bonus criteria

• Short-term leverage for cash flow

• Payment source flexibility

Cons of paying a mortgage with a credit card

• High fees regardless of method

• Potentially higher APRs on cash advances

• Stacked interest rates on mortgage and credit card

• Risk of high credit utilization or maxing out card

• Potential negative impact on credit score

• Danger of debt spiraling out of control

Final Thoughts: Should You Use a Credit Card To Pay Your Mortgage?

In most cases, it wouldn’t make sense to use a credit card to pay your mortgage. You’d likely be facing multiple fees and multiple APRs, which make it a financially risky move.

Even if you had a 0% APR on the credit card, it would only be for a limited time, and the transaction fees to make it all happen would still apply. If you didn’t then pay off the entire amount before the promotional period ends, you’d face some pretty hefty interest rates when combining both sides. And carrying that balance could easily cause your debt to snowball out of control.

If you’re doing it all to earn credit card rewards, and the math works out, you might net a small profit. But that requires a perfect storm of conditions — the right APR, the right fees, enough available credit, and enough cash flow to pay it all off on time. And to be realistic, most of these strategies would be more likely to cost you than provide benefit.

On the other hand, if you’re interested in earning credit card rewards without worrying about intertwining them with your mortgage payments, feel free to compare your options and check if you pre-qualify for your favorites.