Can you pay your mortgage with a credit card?
Find out why paying your mortgage with a credit card is nearly always a bad idea, and where you can get help if you’re struggling to keep up with your mortgage payments.
Find out why paying your mortgage with a credit card is nearly always a bad idea, and where you can get help if you’re struggling to keep up with your mortgage payments.
Can you pay a mortgage with a credit card?
Directly, no. Indirectly, yes. While you can’t generally make a mortgage repayment with a credit card, if your credit card has a money transfer facility you could technically transfer funds from your credit card into a bank account to cover a direct debit. But be warned: this is usually a bad idea, as you’re likely to be charged for the service and may have to pay interest on the funds straight away.
Credit cards generally have much higher interest rates than mortgages, which again would mean that using your card is more expensive.
If you’re worried about being able to make your mortgage payment, it’s important to speak to your mortgage lender as soon as possible. See our guide on options if you can’t pay your mortgage for more on this.
What’s wrong with using a credit card to pay my mortgage?
If your mortgage lender was a rare exception to the norm, and was willing to accept a credit card payment, it may be treated as a cash advance by your card provider. This means that you’ll start paying interest on the payment immediately.
Even with a 0% credit card you’ll still need to clear what you owe before your 0% period ends to avoid interest charges.
Any interest you pay on credit card debt will be on top of the interest you’re already paying on your mortgage. And credit card interest can be 20% or more, making it a very expensive form of debt.
So, unless your financial difficulties are only temporary, it’s better to find an alternative.
Alternatives to using a credit card for your mortgage
If you’re struggling to afford your mortgage payments, help is available. Rather than using a credit card, try these steps first:
Contact your mortgage provider
If you’re in danger of missing a payment, get in touch with your lender. It’s better to be honest about your situation than fall into arrears.
The lender may be able to help by:
- Giving you a payment holiday, where your payments are paused for a while to give you breathing space. Your mortgage debt will continue to accrue interest during the holiday, which means you could end up owing more in total – so you’ll need to decide whether it’s worth it for the short-term peace of mind
- Letting you pay just the interest on your mortgage for a few months to reduce your monthly payments
- Extending your mortgage term so that you pay your debt back over a longer period. This will reduce your monthly payments but you may pay back more overall as you’ll be charged interest for longer
- Switching you to a different deal – for example, a fixed rate if you're currently on a variable mortgage.
This might give you the breathing space you need to get back on track or provide a longer-term solution.
What about selling and buying a smaller home?
If you simply can’t afford your mortgage payments anymore – perhaps because your personal circumstances have changed or your mortgage rate has gone up – you may need to consider moving house. But remember to factor in stamp duty, which can be thousands of pounds.
Tell your lender if you’re facing financial difficulties and intend to downsize to a smaller or more affordable home, as it may factor this in to how it handles your payment difficulties.
Use your mortgage protection insurance if you have a valid claim
Mortgage payment protection insurance is designed to cover the cost of your mortgage payments for up to 12 months if you’re unable to work because of injury, illness or involuntary redundancy.
If you have a policy, check the terms and conditions to see what you’re covered for before putting in a claim.
Alternatively, you might be able to claim on other types of income protection insurance, including accident, sickness and unemployment (ASU) cover.
Get free debt advice
If you want to talk through your options before making a decision, you can get free debt management advice from these organisations:
National Debtline
0808 808 4000
They’ll be able to check if there are any benefits or entitlements you might be able to claim and give you information that could help you decide on a plan of action. If you live in England or Wales, you may be able to apply for the Breathing Space debt respite scheme via a debt advisor, to give you time to sort your finances out.
If money problems are affecting your wellbeing, there’s a number of mental health charities you can speak to including Mind and the Samaritans.
Frequently asked questions
Do mortgage payments affect your credit score?
Yes: if you have a good history of making mortgage payments on time and in full, it can help build your credit score.
But if you try to pay your mortgage with a credit card and your payment is rejected, this could have the opposite effect and seriously damage your credit score.
Is missing one mortgage payment bad?
Missing just one mortgage payment means your mortgage will be considered ‘in arrears’. This will be marked on your credit report and you’ll almost certainly see your credit score go down.
This means you’ll have more difficulty securing other types of credit, such as a loan or credit card, in the future.
If you miss a mortgage payment, it’s vital you contact your mortgage lender as soon as possible. Lenders are obliged to treat borrowers fairly and those that are signed up should offer you help under the Mortgage Charter.
What other bills can be paid with a credit card?
You should be able to pay most of your household bills, including utilities and council tax, with a credit card.
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The Editorial Team - Compare the Market
Experts in personal finance, insurance and utilities
Compare the Market’s Editorial Team is made up of industry experts with decades of experience in personal finance, insurance and utilities. Each of our authors has an area of expertise, where they can share their extensive experience to help you get a better deal, by finding the right product and saving money.