Can You Pay Your Mortgage With a Credit Card?

Most people pay their mortgage straight from their bank account via a monthly ACH transfer or paper check. But in some cases, you might prefer to use a credit card, like if you’re trying to earn extra points or if your budget is tight for the month.  

Lenders generally don’t allow you to pay your mortgage with a credit card—at least not directly. There are ways to overcome that barrier, but it’s generally not recommended unless you have certain goals and have done the math. We’ll show you how it works and what to consider. 

Can I pay my mortgage with a credit card?

The short answer is yes, you can usually pay your mortgage with a credit card. However, you’ll probably have to jump through some hoops that can wipe out the benefits in most cases. 

How to pay your mortgage with a credit card

There are a few potential ways that you can use a credit card to pay your mortgage:

• Directly with your credit card: Most mortgage lenders do not allow you to pay with a credit card—but some do, and you won’t know unless you check with them.  
• Third-party services: Some companies, like Plastiq, allow you to pay your mortgage and other regular bills with a credit card. 
• Credit card cash advance: Some cards let you take out an advance from your credit card, either in paper currency or by writing a check, but be aware that doing this could incur additional fees.
• Buying a money order or gift card: You can sometimes purchase cash analogs with your credit card, which you can use to pay your mortgage. 

Keep in mind that each of these options has its own sets of pros and cons, which we’ll delve into next. 

Pros and cons of paying my mortgage with a credit card

Pros

• It may help build credit

  If you don’t have a lot of credit card payments on your credit report, using it to pay your mortgage can help add more payment history if you’re careful.

• Stay afloat in lean months

  You can technically ensure your mortgage payment is made on time by paying it with your credit card, but this is a risky move that could set you back further into debt.

• Earn extra points and rewards

  If you have a good rewards credit card, you can earn a lot of points by making a large purchase, such as your mortgage payment..

Cons

• Expensive fees

  Whether you get a cash advance or use a third-party service, the fees you’ll pay (up to 3.5% with Plastiq, for example) generally outweigh the rewards you earn.

• Clunky process

  Unless you have a rare lender that allows you to pay with a credit card directly, you’ll have to go through various time-consuming services and steps.

• Higher interest rate

  Along with higher fees, credit cards have much higher interest rates, too—which can trap you in debt unless you pay off your card in full.

• Credit score damage

  Taking on a large amount of credit card debt all at once can mess with your credit utilization ratio, causing your credit score to drop.

• Spiraling credit card debt

  Even if you can pay off the debt right away, it’s tempting to let it sit, which is dangerous because you can quickly get in over your head with these large amounts.

Ask the expert

Erin Kinkade

CFP®

If a lender allows you to pay the mortgage (or rent) with a credit card and you can pay off the balance each month, the benefits from the rewards could be worthwhile and a smart move. If you’re using a credit card indirectly to pay the mortgage for a short-term span (no more than 12 months and ideally with a 0% introductory period) and have a plan to pay off the balance, then this is a better option than ending up in a precarious situation and potentially facing uncertainty about your living situation. 

Should you pay your mortgage with a credit card?

We’ve shown that you can often pay your mortgage with a credit card and the pros and cons, but only you (or a trusted advisor) can make that call. Here’s how to apply that information to specific scenarios when you might want to use your credit card to pay your mortgage:

When you don’t have the cash

If you don’t have enough money in your bank account to pay your mortgage, paying via credit card is better than becoming homeless. But it’s generally a last-ditch option. 

Most people don’t know they have many choices for getting help with their mortgage payments, almost all of which are preferable to using a credit card (more on that below).

Besides, to use your credit card to pay your mortgage, you must have enough available credit first. You’ll also need the means to pay it off in the same month to avoid getting trapped in debt.

If you’re already short on cash, it’s unlikely those two things will be the case—meaning it’s either not an option for you or a pathway to even more problems. 

Read More

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When you want to maximize your reward points

If you have a rewards credit card, it can make paying your mortgage that way tempting. At first glance, it seems smart: Make your monthly mortgage payment using a rewards card, rack up points, and then pay off the bill before interest accrues. 

But as we’ve seen, most mortgage servicers don’t allow customers to pay with a credit card. Instead, you’ll need to use a roundabout method to pay your mortgage with your credit card, such as using a third-party service like Plastiq. 

Plastiq charges a fee of up to 3.5% of your payment amount. Most flat-rate cash-back credit cards only offer 2% cash back on your purchases, meaning you’re paying an extra 1.5% out of pocket to snag more points. 

For the math to work out, you’ll need to calculate exactly how much it costs you in fees to pay your mortgage with a credit card. Then, compare that to the benefits you get in return, down to a fraction of a cent. 

What if you have a new card with a signup bonus?

You might come out ahead in one situation: A new credit card offers bonus points, such as airline miles if you spend a certain amount in the first 90 days after opening the account. 

This technique can be helpful when the math works in your favor. For example, if a credit card offers a $900 bonus if you spend $4,000, paying that pesky 3.5% fee is worth it if you earn a 22% return.

However, if you can’t pay off your credit card balance before interest charges accrue, you might be worse off than if you just paid your mortgage in cash—especially if it leads you to accumulate more debt.

Ask the expert

Erin Kinkade

CFP®

If you’re using a credit card to pay the mortgage chronically, it would be wise to consult a financial counselor/mortgage lender to explore options to gain control of your cash flow and the utilization of the credit cards, which may lead to making behavior changes or downsizing your home.

Alternatives to paying your mortgage with a credit card

If you’re hoping to earn credit card rewards, then you don’t have any other options besides using your credit card as much as possible on all other spending. That’s what it’s meant for, after all. 

If you don’t have the cash to pay your mortgage this month, you have many better options than using your credit card. 

Credit counseling

You can get a referral to a nonprofit credit counselor through the National Foundation for Credit Counseling. It’s free to speak one-on-one with a live counselor—online, over the phone, or in person—and discuss your concerns in an introductory credit counseling session. 

Compassionate credit counselors can help you put together a budget, identify and assess all of your options for assistance, and even act as a go-between for you and your lender. Helping people with housing affordability problems is one of their specialties.

Personal loans

A personal loan can be an option for those looking for quick funding.

Many online personal loan companies exist, and you must compare your options to receive the best terms. If you are time-dependent, check the average time to fund at each lender to see which company fits your time frame.

Read More

Best personal loans

Restructure your mortgage

If you’re having a problem scraping together the money to pay your mortgage each month, you may benefit from restructuring your loan, also known as “loan modification.” Many lenders, but not all, offer these types of programs.

Unlike a refinance, which replaces your existing mortgage with a new one, a modification rearranges the mortgage you already have with a longer term length, a smaller interest rate, or some other helpful accounting tweak.

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