Can You Put Your Mortgage on a Credit Card?

Individuals often consider paying a mortgage, one of the largest financial commitments, with a credit card for reasons like managing short-term cash flow, leveraging credit card rewards, or convenience. While direct credit card mortgage payments are generally not possible, several indirect methods exist. This article explores the limitations of direct payments and details indirect avenues, including third-party services, cash advances, and balance transfers.

Direct Payment Limitations for Mortgages

Mortgage lenders do not accept direct credit card payments for operational and financial reasons. A primary factor is processing fees charged by credit card companies, known as interchange fees. These fees, ranging from 1.10% to 3.15% of each transaction, are costs the lender would incur. Accepting credit card payments for large sums like mortgage payments would mean absorbing substantial costs, potentially reducing revenue.

Processing credit card transactions involves an administrative burden for lenders. There is also an inherent risk of chargebacks, where a cardholder disputes a transaction, leading to potential financial losses. Mortgage payments are fundamentally debt repayment, not a purchase of goods or services, differing from typical credit card transactions.

Third-Party Services for Mortgage Payments

Using a third-party payment processing service is a common indirect method for paying a mortgage with a credit card. These services act as intermediaries, charging your credit card and forwarding the payment to your mortgage lender. Services like Plastiq allow individuals to pay various bills, including mortgages, using a credit card.

Users provide their mortgage account number, lender details, credit card information, and payment amount. The process involves navigating the platform, inputting details, and authorizing the transaction. After receiving payment, the service sends an electronic payment or check to the mortgage company. This method bypasses direct payment limitations.

A direct cost for these services is the processing fee, typically a percentage of the payment. Services like Plastiq charge a fee ranging from 2.85% to 2.9% of the mortgage payment. This fee is added to your credit card. If the balance is not paid in full by its due date, standard credit card interest rates apply. These rates, often 18% to 29% annually, accrue on the outstanding balance, adding to the overall cost.

Cash Advances and Balance Transfers for Mortgage Payments

Beyond third-party services, cash advances and balance transfers offer indirect avenues to obtain funds from a credit card for a mortgage payment. A cash advance involves borrowing money directly against your credit card’s line of credit. You can obtain a cash advance using your physical card and PIN at an ATM, visiting a bank teller, or utilizing convenience checks from your credit card issuer.

Cash advances come with specific direct costs. Issuers charge a cash advance fee, a percentage of the advance, ranging from 3% to 5%, with a minimum fee of $10. Unlike regular purchases, interest on cash advances begins accruing immediately from the transaction date, with no grace period. The annual percentage rate (APR) for cash advances is also higher than for purchases, ranging from 20% to 35%.

Balance transfers involve moving existing debt from one credit account to another, or transferring funds directly to a bank account. To initiate a balance transfer, provide the new credit card company with account numbers and amounts of debts to transfer. Some credit card companies offer balance transfer checks that can be written to yourself and deposited into your checking or savings account, providing cash for a mortgage payment.

Direct costs include a balance transfer fee, a percentage of the transferred amount, usually between 3% and 5%. While some promotional offers feature a 0% introductory APR for a specified period (6 to 21 months), standard interest rates apply to any remaining balance after this period ends. These rates can vary significantly, impacting the overall expense if the transferred amount is not fully repaid within the introductory timeframe.