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Can I Pay My Mortgage With a Credit Card?

Millenial girl paying her mortgage online using her credit card

One thing you may be wondering as a homeowner is can you pay your mortgage with a credit card? The most straightforward answer with the least amount of clarification is: yes if you don’t mind paying an additional fee, you can pay your mortgage with your credit card. However, while this is an option for many homeowners, it’s not necessarily an easy one, nor is it something that all homeowners should do. The better question in this scenario for all homeowners should be: should I pay my mortgage using a credit card?

There are countless pros and cons that you must consider as a homeowner regarding your mortgage payments. Before you make a decision, we encourage you to research your options thoroughly. Below, we will explain how to pay your mortgage using a credit card, why it would be a good option, and why you shouldn’t do it.

How to use your credit card to pay your mortgage

Before you try to pay directly to your mortgage lender with a credit card number, know that not all lenders accept this form of payment. Instead, you may have to use a third-party payment service that can help you. Keep in mind, though, these services often come with a fee that you need to pay as well. Some of these parties could allow you to use automatic payments as well.

Another option to consider is a cash advance through your credit card. Many credit cards allow their clients to take a cash advance out on their credit cards, but it comes with a price. Like any payments made on a credit card, taking out a cash advance typically comes with interest rates to consider, meaning it could be pretty expensive to do so. 

Why it makes sense

Here are a few reasons to consider using a credit card to pay the mortgage: 

  • Avoid a late payment: If you are close to being late on your mortgage payments, you may consider using a credit card to avoid potential problems with your lender. While it could cost you more to do so, using a credit card could give you quick access to money you may not have right away. 
  • Avoiding foreclosure: If you face foreclosure, you can use this payment method to pay the bank and avoid losing the home. In this case, the cost of interest or service fees outweigh losing a home altogether.

Why you shouldn’t do it

Choosing to pay a mortgage using a credit card is not for everyone. Unfortunately, it can become more costly than the average payment. For instance, paying the service fee for a third-party provider would be more than any rewards you would get from your credit card. Even more, it may impact your credit score negatively because the more you take out, the higher your credit utilization ratio. If you get closer to your maximum limit on credit cards, you can take a hit on your credit score. 

If you are unable to make payments on the credit card quickly, it could impact you. You still have to pay the credit card off or down. If you have trouble making a mortgage payment again and you’ve already used close to your credit card limit, you may be unable to utilize this option too. 

Before making any decision, make sure to research what options are available. Homeowners have payment options, but they’re not always easy or advisable.

Disclaimer: The above is provided for informational purposes only and should not be considered tax, savings, financial, or legal advice. All information shown here is for illustrative purpose only and the author is not making a recommendation of any particular product over another. All views and opinions expressed in this post belong to the author.

Scott Teesdale

Written By Scott Teesdale

I use data and technology to help Millennials navigate the ins-and-outs of buying or selling a home in today's market. From appraisals to mortgages to zoning, I cover it all with the goal to teach others. Connect with me on social via the icons above.