Can I pay my mortgage with a credit card?
Can I pay my mortgage with a credit card?
In the Uk, it is very unlikely you will be able to pay your mortgage with your credit card. Although it is possible to use the funds from your credit card to pay for your mortgage by moving them to your bank, you cannot use your credit card to pay for your mortgage.
How can you use your credit card to pay your mortgage?
For you to repay your mortgage with your credit card you will need to do what is known as a money transfer.
This is when you move money to your bank account from your credit card.
Your credit card provider will charge you for letting you move funds from your credit card into your bank account.
The money transfer charge will differ between credit card providers so you should check with your credit card provider before making a money transfer.
You can also use your credit card to repay your mortgage by doing a cash advance.
This is when you withdraw money from your credit cards using an ATM.
The credit card provider will also very likely charge you a fee for doing a cash advance.
Should you use your credit card to pay for your mortgage?
Paying for your mortgage with your credit card may not be the wisest thing you will do
The credit card provider will charge you a money transfer fee for using these funds and if the funds then end up being charged your monthly credit card APR on them then they will potentially cost more than the interest on your mortgage for that month.
Most mortgage lenders will offer you options if you are struggling to repay your mortgage and they will likely not recommend using your credit card to repay your mortgage as you could simply be getting in more debt by doing this.
Some of the alternatives to using your credit card to pay your mortgage
Get a mortgage repayment holiday:
If you explain to the mortgage lender that you cannot keep up with your monthly mortgage repayments then the mortgage lender may offer you the option to have a mortgage repayment holiday.
This means you will have a period of time when you do not have to repay your mortgage.
The issue here, of course, is that when you take a mortgage repayment holiday you risk having much bigger repayments to make when the mortgage repayment holiday is over.
This is the case because when you stop making your monthly mortgage repayments the interest on the capital being charged increases and when you resume your monthly mortgage repayments you will owe more capital at that point than you would have if you stuck to your original mortgage repayment plan which would have been explained to you on your key facts illustration document.
You may also have to make increased monthly mortgage repayments than what would have been stated on your key facts illustration document in order to bring your account back to normal.
Increase your mortgage term:
You may also be able to increase your mortgage term rather than use your credit card to pay your mortgage.
Increasing your mortgage term will make the mortgage repayments dude every month become less but will also increase the total amount of interest you owe on your mortgage.
Ou should consider this when deciding if to pay your mortgage with your credit card or not.
Reduced monthly mortgage repayments:
Some mortgage lenders may also let you make reduced monthly payments to your mortgage than the standard mortgage repayment you may have been required to pay as detailed on your key facts illustration document.
Reduced mortgage repayments will mean that you may be able to cope for now but this will also mean that a lot of mortgage interest will be added to your mortgage as you now owe more due to interest being charged on more capital than it would have been at the time your reduced monthly mortgage repayments end. You may have to pay increased mortgage repayments in the future.
Support for mortgage interest
If you are struggling to make your monthly mortgage repayments then the support for mortgage interest may be able to help you. The support for mortgage interest is a scheme offered by the government to help cover the interest element of your mortgage.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.