How to pay your mortgage with a credit card



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Experienced mileage and point collectors try to pay all possible expenses to the credit card in order to earn bonus points. What are the costs more than your mortgage payment?

Credit card holders can pay for their mortgage with a credit card, but they will have to overcome several hurdles to do so. Generally, cardholders are not advised to make a large purchase with a credit card unless they can pay in full by the end of the monthly billing cycle. The high interest fees would outweigh any short-term gain from making a large mortgage payment.

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Mortgage lenders such as banks or credit unions usually do not accept credit card payments for several reasons. When a credit card holder makes a payment on a mortgage loan with a credit card, he or she essentially transfers the debt from the loan to the credit card account. If borrowers are unable to pay off their credit card balance on time and run out of ability to make mortgage payments, it becomes possible for mortgage defaults to occur, which no lender wants. Some lenders also choose not to pay the processing fees usually associated with credit card purchases. But all is not lost if you are ready to jump through a few hoops.

How to pay your mortgage with a credit card

While most mortgage lenders do not directly accept credit card payments, there are workarounds for the average credit card holder.

Use a third-party application to conduct payment transactions

Plastiq is currently the only active payment system that allows people to pay for their mortgage with a credit card, and this will cost 2.85% of the transaction amount in commission. They will send the mortgage lender a check for the amount purchased. For those looking to get a one-time signup bonus, using Plastiq might be a good option. Cardholders should be aware that Plastiq does not support all credit card issuers or all payment networks.

Get a prepaid card or money order

Credit card holders can purchase a prepaid Visa card at a grocery store or other local store and use it to pay their mortgage online. Check back with your mortgage lender to make sure they accept prepaid cards as online payments. There may be a small fee if they do so.

Another option is to use a prepaid card to buy a money order and then hand it over to a local bank branch to pay for your mortgage. There are several important points to consider here:

  • Check again if your local post office or grocery store allows money transfers using a prepaid card (or even a credit card).

  • Make sure the money order can be delivered directly to your local regular bank branch. Sending a money transfer to a lender involves its own risks and headaches – in the worst case, the money transfer will be lost or stolen, and the borrower will have to wait for a refund and make a delay in payment.

  • Consider any fees associated with using a credit card to purchase a prepaid card, as well as purchasing a money order using a prepaid card. The fees may end up being worth more than any possible reward.

Is it worth paying on a mortgage with a credit card?

Before making a mortgage payment using a credit card, determine if this is possible at all. Cardholders should consult credit card terms and conditions to determine restrictions. Cardholders should also consider which payment network they have (such as Visa, Mastercard, Discover, or American Express) as this can be a major obstacle to making a mortgage payment with a credit card. Check with your mortgage lender if there are any restrictions on the types of payments accepted.

Once the cardholder determines if this is possible at all, he or she should think about what the ultimate goal is to pay off the mortgage with a credit card. If using a credit card is the last resort due to financial problems, this is probably not the best idea.

Mortgage loans usually have low interest rates (much lower than those on a credit card). If the cardholder is unable to pay the balance before the end of the billing cycle, higher rates will increase the total cost. The accumulation of large amounts of debt in the credit account will also increase the cardholder’s loan utilization rate, which over time will lead to a decrease in the credit rating.

Reasons for Paying a Mortgage with a Credit Card

There are several scenarios where paying your mortgage with a credit card might be a good idea:

  • Get your welcome bonus faster. Some credit cards offer big welcome bonuses that require you to spend at least a few thousand dollars in a given period of time. New cardholders can reach this minimum faster when they make large purchases like mortgage payments. If the welcome bonus outweighs any small fees associated with paying off the mortgage using a credit card and the cardholder can pay off the balance before interest is charged, it might be worth it.

  • Receiving rewards in excess of the purchase commission. Credit cards that offer cash back rewards or dollar points can sometimes benefit the cardholder when paying for a mortgage with a credit card. It’s only worth it if the fees associated with the transaction are less than the reward. For example, if a third-party service charges a 2.5% fee to pay a mortgage with a credit card, and the card has a 3% cashback, that 0.5% fee difference might be enough to outweigh the original cost. …

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Bottom line: only you can balance risk and reward

Paying a mortgage with a credit card is possible, but may not always be the smartest strategy for credit card holders. There are many obstacles to overcome for this to happen. While this may be the right choice for some, every cardholder should ask themselves: is it worth it?

Sometimes the potential credit card reward is worth more than any small commissions incurred in the process, especially when there is the opportunity to get a big welcome bonus.

But cardholders should take the time to consider all the factors before biting the bullet. Make sure your credit card payment network allows cardholders to pay for mortgages with them. For example, Visa credit card holders will not be able to make mortgage payments on a third-party payment processing site such as

Distributing mortgage payments using a credit card is not an effective strategy. Be absolutely certain that your credit card balance can be repaid before the end of the billing cycle.

Cardholders in financial hardship probably should not use their credit card to pay off their mortgage. Not only is there a high potential for debt growth, but the borrower may end up with a late or rejected mortgage payment, or worse, may not pay back the loan.

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