Can You Pay a Mortgage With a Credit Card?
Understand the complexities and financial risks of using a credit card to pay your mortgage, and learn about responsible options.
Paying a mortgage with a credit card is rarely an option, though various indirect methods exist. Understanding these processes and their implications is important.
Payment Methods and Feasibility
Mortgage lenders typically do not accept direct credit card payments due to substantial processing fees, often 2% to 3% or more, which reduces profitability for the lender. Homeowners must generally look to indirect channels.
Third-party payment services provide a workaround. Platforms like Plastiq allow users to pay bills, including mortgages, using a credit card. The user pays the service with their credit card, and the service then remits the payment to the mortgage lender via electronic transfer or physical check. These services charge a fee for facilitating the transaction.
Another indirect method involves cash advances from a credit card, allowing borrowing against your credit limit for a mortgage. This method is generally discouraged due to high costs and immediate interest accrual. Some credit cards offer balance transfers directly to a bank account, allowing funds to be deposited and used for a mortgage payment. This approach also carries financial downsides.
Understanding the Transaction Costs
Using a credit card for a mortgage payment through indirect methods incurs financial costs that can quickly outweigh any benefits. Third-party payment services commonly charge a percentage-based fee, typically 2.5% to 3.5% of the payment amount. For example, a $2,000 mortgage payment at a 3% fee would add an extra $60.
If the full credit card balance is not paid by the due date, high Annual Percentage Rates (APRs) apply. The average credit card interest rate can be around 23.99% as of August 2025. Any unpaid portion of the mortgage payment carried on the credit card will accrue significant interest, making the total cost higher.
Cash advances come with steep costs. Credit card companies typically charge a cash advance fee of 3% to 5% of the amount advanced, often with a minimum fee of $10. Interest on cash advances usually begins to accrue immediately, without a grace period. The APR for cash advances is often higher than for standard purchases, sometimes ranging from 24.99% to 29.99% or more. Balance transfers to a bank account also typically involve a balance transfer fee, usually 3% to 5% of the transferred amount.
Impact on Credit Standing
Using a credit card for a mortgage payment can significantly affect credit score and overall credit health. A key factor influenced is the credit utilization ratio, which represents the amount of credit used compared to the total available credit. Charging a large mortgage payment can increase this ratio, consuming a considerable portion of the available credit limit. For instance, a $2,000 mortgage payment on a $10,000 limit pushes utilization to 20%, nearing the 30% threshold recommended by financial experts. A higher credit utilization ratio can negatively impact credit scores, as it may signal increased financial risk to lenders.
Payment history is another component of credit scoring. Making timely payments on credit accounts is important for a strong credit profile. If the credit card bill, inflated by a mortgage payment, is not paid in full and on time, it can lead to missed payments reported to credit bureaus. This can severely damage the credit score, as payment history is a significant factor.
Carrying a mortgage payment on a high-interest credit card can lead to accumulating debt. High fees and interest can make it difficult to pay off the balance, potentially increasing debt burdens. This accumulation of debt can make it harder to manage other expenses and potentially result in further missed payments, negatively impacting future creditworthiness.
Other Financial Options
If facing difficulty making mortgage payments, homeowners have several responsible financial alternatives to consider before resorting to costly credit card methods. A proactive step is to contact the mortgage lender directly. Lenders often have programs to assist borrowers experiencing hardship, such as payment deferrals, loan modifications, or forbearance options. These programs can provide temporary relief by reducing or suspending payments for a specified period, offering time to regain financial stability.
Reviewing and adjusting the household budget can identify areas for cost-cutting and opportunities to increase income. This involves a thorough assessment of spending habits to prioritize essential expenses and reduce discretionary spending. Utilizing an existing emergency fund is a prudent option, as these funds are specifically intended for unexpected financial challenges, providing a cushion without incurring additional debt.
Seeking professional financial counseling from non-profit agencies can provide personalized advice and support. Organizations affiliated with the National Foundation for Credit Counseling (NFCC) offer free initial consultations and can help develop a budget, explore debt management plans, or provide guidance on other financial challenges. These agencies can often negotiate with creditors on a borrower’s behalf.
Exploring other loan options, such as personal loans or home equity loans, may be considered with caution. Personal loans, with average interest rates ranging from 12% to 26% as of August 2025, typically have lower interest rates than credit cards. Home equity loans or lines of credit (HELOCs), secured by the home’s value, typically offer lower interest rates than unsecured personal loans or credit cards, with average rates around 8% as of August 2025. These options involve collateral and should be approached with careful consideration of terms and professional financial advice.