How to pay a mortgage with a credit card?

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    Jordan Moore
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    Team StellarFi
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    It is generally not possible to pay your mortgage with a credit card. Mortgage companies and some credit card companies don’t allow credit card mortgage payments. Few credit card companies allow debt-for-debt payments. This also depends on your lender, credit card issuer, and credit card network. You could get a third party service to make the payment for you while charging your credit card but you may end up paying a lot more in the process.

    There are third-party payment services like Plastiq ® , which allow you to make mortgage payments if you have either a Discover ® or Mastercard ®  credit card. Plastiq charges 2.9% of your mortgage payment each time you use your credit card. Then, it makes an electronic payment depending on whether the lender accepts it, or writes the lender a check. You can either pay manually, set up automatic payments, or make a one-time payment. You then immediately pay back your credit card for the mortgage payment and processing fee and earn rewards if you made the payment with an eligible credit card. 

    Things to consider before using your credit card to pay off your mortgage

    Fees: Often, the fees you pay to use third-party services are higher than the rewards you may earn even with large payments like a mortgage. The only exception would be if you’re getting a high credit card sign-up bonus for a one-time mortgage payment through your credit card. 

    Interest: You also begin to accrue larger interest rates if you don’t pay all your credit card debt every month. You’ll end up carrying larger ongoing balances if you make either a late payment or miss a payment. 

    Credit score: As with accumulating large interest rates, not paying off your credit card balance on time increases your credit utilization ratio which makes up 30% of your credit score. Your credit score can take a hit if your credit utilization is higher than 30%. Before making your mortgage payments with your credit card, you may want to talk to your card issuer about increasing the credit limit so that your credit utilization rate is not affected. 

    Your lender, credit card issuer, and credit card network have to agree for the mortgage payment to go through successfully. But each entity has its own rules. 

    Paying off your mortgage with your credit card is thus only worth it if the rewards are higher than the costs — including the impact on your finances and credit score.

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StellarFinance, Inc. and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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