Best Credit Cards in November 2024Articles
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
|
Advertising Disclosure
LendingTree is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products. We are compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order).

Advertising Disclosure

LendingTree is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products. We are compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order).
|
American Express Disclosure
Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more.

American Express Disclosure

Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more.

Can You Pay Your Mortgage With A Credit Card?

Updated on:
Content was accurate at the time of publication.
shortened_cc_editorial_note
Citi is an advertising partner.

Yes, you can pay a mortgage with a credit card. Although your local mortgage lender won’t let you swipe your Mastercard for your monthly payment, there are workarounds for paying your mortgage with your credit card. Before employing one of these methods, you should consider whether or not you should use your credit card to pay your mortgage.

There are very few situations in which it makes financial sense to pay your mortgage with your credit card. You almost certainly will pay more money if you use plastic over paper when paying your mortgage. It also will take time and creativity to make this a reality. Because of this, we only recommend using a credit card if it will keep you from avoiding severe consequences.

How to pay your mortgage with a credit card

There are multiple ways to use your credit card for your mortgage payment. The workarounds we’ve found require using additional services to get the cash to send to your mortgage lender.

All of them add an extra layer of complexity to making your payment. Additionally, they are not free — you will pay substantial fees with all these options.

Use a third-party service such as Plastiq

You can use a third-party payment service to act as an intermediary between you and the bank. The service will charge your credit card for the mortgage payment and send the funds to your bank via electronic payment or a paper check.

Plastiq is one such service that can handle this. Of course, there’s a cost to this service; you’ll pay a 2.9% transaction fee for credit card payments. You’re also on the hook for getting the money from Plastiq to the bank. That’s another $0.99 to $39, depending on which type of delivery method you choose.

The average mortgage payment in the U.S. is $2,317 so we’ll use that to do these calculations.


Here’s a look at how the math works out

($2,317 payment x 0.029 transaction fee) + $0.99 ACH transfer fee =
$67.19 + $0.99 =
$68.18


Generally, you cannot pay off a debt with another form of debt.


Plastiq only accepts Mastercard and Discover credit cards because Visa and American Express user agreements prohibit this type of service.

Cash advance

Another way to get cash from your credit card is to do a cash advance. You can withdraw cash at an ATM or bank and use the cash to pay your mortgage payment.

The main reason why this isn’t a good idea is because there’s usually no grace period for cash advances. Credit cards usually only charge interest if you have a balance remaining after your payment due date. However, cash advances accumulate interest from day one. The average regular APR for credit cards is currently 24.66%, and some credit cards charge a higher rate for cash advances.

Most cards also charge a steep cash advance fee that is often stated as “the greater of either $10 or 5%.” The specific numbers vary between cards, but this is a pretty solid number to use as an estimation.

Taking out a cash advance might not even be possible if your line of credit is lower than the amount you need.

Here’s a look at how the math works out on a $2,317 mortgage payment with a 24.66% APR and a 5% cash advance fee:

$2,317 x .2466 APR = $517.37 interest you’d pay over a year
$517.37 interest /365 days in a year = $1.42 interest you pay each day
$1.42 interest x 30 days = $42.60 interest
$2,317 x 0.05 cash advance fee = $115.85

Balance transfer check

Sometimes, credit card companies send you balance transfer checks that you can use to pay off a debt. The amount is then put on your new credit card account, often with a promotional APR that lets you pay it off for a year or more without interest.

This is a viable option if you make the check out to your mortgage company and have enough available credit on your account. An intro APR may alleviate some financial stress but you don’t get rewards on balance transfers.


Here’s a look at how the math works out, assuming you get an intro 0% APR for 12 months with a customary 5% balance transfer fee:

$2,317 x 0.05 balance transfer fee = $115.85


Tip

Banks may also send out convenience checks, which are often treated as a cash advance (which means interest begins to accumulate from the first day). Read the fine print carefully to ensure you know what you’re signing.

Buy prepaid cards and convert to money orders

This method is tedious but could work, and is the least expensive option, if you can find a place to accept prepaid debit cards for money orders.

You may be able to use your credit card to buy enough Visa or Mastercard prepaid cash cards from a retailer. You can then use these cards to pay for a money order to take your mortgage lender.

For example, the cost for Visa Vanilla gift cards is the dollar amount plus a $6.95 fee per card.
For a $2,317 mortgage, you’d have to buy five $500 cards. If you want to get closer to the exact amount you need, you must buy extra cards in smaller denominations which adds to the fees. Shipping adds another $10.95 if you choose the least expensive option.

You’ll also have to pay money order fees. Walmart offers the lowest price, at $1 each. Usually, money orders are limited to $1,000, so you’d need to get three money orders.

Here’s a look at how the math works out to buy the prepaid cards and money orders:

Prepaid card cost: (5 x $6.95) + $10.95 = $45.70
Money order cost: 3 x $1= $3
Total cost: $45.70 + $3 = $48.70


Be sure to contact your mortgage holder to ensure that money orders are an acceptable form of payment. Additionally, if you use this method, you should make your payment in person to ensure that it is credited to you, since there is no personal information on the money order.

Use the Rocket Visa Signature Credit Card

| Disclosures
Rocket Visa Signature Credit Card*
Rocket Visa Signature Credit Card
Learn More
on Celtic Bank's secure site
N/A
20.49% to 30.24% Variable
$95 (waived for customers with an existing Rocket mortgage)
5 points on every $1 spent
  • Get 5% cash back toward a new Rocket mortgage
  • Get 2% cash back to pay off an existing Rocket mortgage
  • Annual fee waived for existing Rocket mortgage holders
  • Extended warranty protection, purchase protection and cell phone protection
N/A
*The information related to the Rocket Visa Signature Credit Card has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

You can’t pay your mortgage with the Rocket Visa Signature Credit Card, but the reward points you earn with it can be used toward your Rocket mortgage or a down payment on a new home with a Rocket Mortgage. Customers earn 5 points on every $1 spent, but the final value of the rewards vary depending how you redeem them.

There are three ways to redeem your rewards, each with a different cash value.

Cash back rateWhen you redeem for:Value of 25,000 points
5%Closing costs and/or a down payment on a Rocket Mortgage$250
2%Rocket Mortgage principal$100
1.25%Statement credit$62.50

Obviously, you’ll get the most value if you save up your rewards for a new home. After you take out the mortgage, you can still apply your rewards toward your principal at a respectable rate. As a cash back credit card, this isn’t a great card since it charges an annual fee of $95 (waived for customers with an existing Rocket mortgage). If you want a 2% cash back card with no annual fee, the Citi Double Cash® Card, Wells Fargo Active Cash® Card or Fidelity® Rewards Visa Signature® Card are better choices.

Factors to consider before using your credit card to pay your mortgage

Fees. vs. rewards

The fees from paying your mortgage with a credit card will likely exceed any rewards that you earn, if you’re able to earn rewards at all. The only situation that might make mathematical sense is if you’re trying to earn a sign-up bonus. However, there are better ways to meet the spending requirements for a bonus, including buying gift cards to a place where you normally shop or dine. (Note, you won’t earn rewards on this type of spending.) Or you could prepay utilities that accept credit card payments.

Interest charges

In the above examples, the interest on taking out a cash advance was more than a dollar per day. That might not seem like much, but added up, it’s a nice chunk of change. We don’t advise taking out a cash advance to pay your mortgage unless you have exhausted all alternatives.

Impact on credit score

This is a less tangible risk of using your credit card to pay your mortgage, but a valid one that needs consideration. Putting your mortgage payment on your credit card may use up a significant part of your credit line.

If you have a $5,000 credit limit and a mortgage of $2,317, for example, you’re using almost 50% of your credit limit. This doesn’t include fees and interest, nor does it factor in charges you’ve already made.

Ideally, you should keep your credit utilization ratio under 30%, or preferably under 10%. Since this metric accounts for 30% of your credit score, you can expect a significant score drop from using half your available credit limit.

Pros and cons of paying your mortgage with a credit card

ProsCons

Improved cash flow


Credit card rewards


Avoid a late payment


May help you earn a sign-up bonus

High interest and fees


Negatively impacts your credit score


Time-consuming to handle the necessary workarounds


Increased credit card debt

Alternatives to paying your mortgage with a credit card

Find out about your lender’s grace period

You may have some time before late fees kick in. The best way to gather relevant information for your mortgage is to make a quick call to your lender if you can’t find the info in your online payment portal.

Consider the late fee versus the fees for paying with a credit card.

Late fees on mortgages typically range from 3% to 6%, far lower than the average credit card APR of 24.66%. The late fee might be worth it if you’re waiting for a paycheck to hit your account and know you can pay soon after.

Take out a personal loan.

A personal loan can give you the funds you need to avoid getting too far behind on your mortgage. Since these can take up to a week or more to process, it’s best to apply for a personal loan as soon as needed.

Talk with your lender.

A simple conversation could go a long way. The lender might reduce or waive a late payment fee as a one-time courtesy. They can also give you information about programs, such as mortgage forbearance, that you could use if your inability to pay stems from more profound circumstances.

Use a credit card for your expenses to free up cash flow.

If cash flow is tight, causing you to consider putting your mortgage payment on plastic, consider putting other expenses on a 0% APR credit card. You can take your time paying off your bill while ensuring you stay in your home. Alternatively, if credit card debt is causing financial struggles, consider a balance transfer credit card that lets you move high-interest debt to a card with a low intro APR.

The information related to the Rocket Visa Signature Credit Card  and Fidelity® Rewards Visa Signature® Card has been independently collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication.

The information related to the Rocket Visa Signature Credit Card, Wells Fargo Active Cash® Card and Fidelity® Rewards Visa Signature® Card has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.

The content above is not provided by any issuer. Any opinions expressed are those of LendingTree alone and have not been reviewed, approved, or otherwise endorsed by any issuer. The offers and/or promotions mentioned above may have changed, expired, or are no longer available. Check the issuer's website for more details.

Recommended Reading