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Should you ever use your credit card to pay your mortgage?

When money is tight, you might be tempted to make your mortgage payments using your credit card. We look at whether this is ever a good idea.
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A credit card can be a great way of spreading the cost of big expenses. But even though your mortgage might be a significant outlay, needing to put it on a credit card is a sign that you are struggling financially.

Read on to find out what to do if you’re tempted to pay your mortgage with a credit card.

Why use a credit card to pay the mortgage?

The main reason people want to pay their mortgage with their credit card is because they do not have enough money in their current account. 

Will my lender let me pay my mortgage with a credit card?

Not all lenders will accept credit cards for mortgage payments. You will usually have to set up a direct debit when you take out the mortgage and they will expect payment to be made that way. However in certain circumstances - for example your direct debit payment won’t clear - some lenders may accept a credit card payment.

If your lender doesn’t permit credit card payments, you could potentially circumvent that problem with a money transfer credit card that lets you transfer money from your credit card into your bank account. However you cannot usually use all of your credit limit on a transfer so you would need to check how much credit you have available first.

Failing that as a last resort you could use your credit card to withdraw cash.

However none of these options would be recommended.

What's wrong with using a credit card to pay my mortgage?

If money is tight, putting a payment on a credit card may feel like you are buying yourself a bit of financial breathing space. However the relief is likely to be short-lived.

Paying for your mortgage on a credit card is likely to work out very expensive in the long run.  This is because some credit card providers will treat a mortgage payment as a cash advance, which means interest will start being charged immediately, as it would if you used your credit card to withdraw cash. This compares to purchases which benefit from a brief interest-free period - typically around 55 days. Adding to the expense, interest rates for cash advances are usually higher than they are for purchases, meaning your debt can quickly spiral.

Even if your payment isn’t treated as a cash advance, you’ll still need to repay the money within a relatively short period, for example 55 days, before interest is charged (unless you have an interest free card). This may still be difficult if you’re cash-strapped. 

Also bear in mind this credit card interest will be on top of interest you are already paying on your mortgage, making it an incredibly expensive debt.

What should I do if I can't pay my mortgage?

How to get help if you are struggling to pay your mortgage

Needing to pay your mortgage with a credit card is usually a sign that you are struggling financially but it could be the prompt you need to regain control.

If you can’t meet your mortgage payments there is help available:

  • Contact your lender: it’s best to be upfront with your lender rather than burying your head in the sand. It may be able to offer you some flexibility, for example offering you a mortgage holiday, or reduced payments for a short period of time.

  • Pay what you can: Paying as much of your mortgage payment as possible shows that you're making an effort to keep up with the payments.

  • Get advice: Your local Citizens Advice Bureau will be able to offer you free, non-profit advice and practical help. Shelter can also offer advice.

Is paying for my mortgage with a credit card ever an option?

It is not generally advised to pay for your mortgage with a credit card and many lenders won’t accept credit card payments because it can be so risky for the borrower. 

If you ever feel the need to do it, you need to be confident you will be able to fully pay off your credit card when it’s due, otherwise your debt will quickly grow. Instead of paying your mortgage with a credit card it's better to focus on why you are struggling and seek help.