Are you thinking of using your credit card to pay your mortgage?
We guide you through the positives and negatives of paying your mortgage by credit card.

Last updated: 23/07/2020 | Estimated Reading Time: 3 minutes

Should you use a credit card to pay your mortgage?

It is possible to use your credit card to pay your mortgage if your card network, card issuer and mortgage lender all agree to it. However, it may not be the best option, and there are other paths that you could possibly take to manage your mortgage repayments. Whilst it may seem like a good option if you’re struggling to keep up with the regular instalments, the higher rate of interest that credit cards usually carry may result in things becoming harder for you in the long term.

In This Guide:

What are the issues when using a credit card?

The expense. Although it may seem like a good idea as your mortgage payments get dealt with, the interest accumulated on your credit card bill is almost always high if you don’t pay it off straight away. This then makes the debt harder to pay off completely, and you end up in almost the same position as before, if not worse.

Generally, it’s not a good long-term solution and will only make your financial situation worse.

Are there any other options?

If you find yourself in difficulty, get in touch with your lender before you make any decisions. They will usually be able to talk you through the possible solutions. This could involve be moving to an interest-only mortgage, or a mortgage holiday. 

Continue to pay what you can towards your mortgage. If you show your lender that you are trying to keep up with payments and that you are committed to paying off your debt, they will be more understanding and more likely to help you out.

Getting debt management advice from your local Citizens Advice Bureau is often helpful (and free!) and they will be able to give you information that will help you decide on which plan of action to take. There are also numerous charities who offer help for free too.

When should you use your credit card to pay your mortgage?

If your financial difficulties are only temporary, and you are confident in your long-term level of financial stability, then using your credit card may be a viable option.

Of course, you also need to be confident that you can pay off the credit card bill swiftly too. This way you avoid having to pay more interest on the debt than you need to.

If this is not possible, you may want to avoid using a credit card to cover your mortgage payments.

What should you consider before using your credit card to pay your mortgage?

Using your credit card may be tempting because of the rewards on such a hefty bill. However, the rewards don’t always outweigh the costs. Often, the cost of a third-party processing fee can eliminate what you would’ve gained as a reward, making it an unattractive option overall.

Additionally, the cost of interest on credit cards can easily add up and get unmanageable if bills are not paid in full at the end of each month. This may work out to be more of a burden if you aren’t completely sure of how stable your income is.

Using your credit card to pay your mortgage can also have a negative impact on your credit rating. It will often increase your credit utilisation ratio - which is something most people would usually want to keep low.

Also, you should be aware that not all credit card companies and mortgage lenders will allow you to use a credit card to pay off mortgage payments - so check with the relevant companies before you start considering this as an option.