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Can you pay your mortgage with a credit card?

If you’re wondering whether you can pay your mortgage with a credit card, find out why it’s not a good idea.

Here’s why credit cards and mortgages don’t mix, and where you can get help if you’re struggling to keep up with your mortgage payments.

If you’re wondering whether you can pay your mortgage with a credit card, find out why it’s not a good idea.

Here’s why credit cards and mortgages don’t mix, and where you can get help if you’re struggling to keep up with your mortgage payments.

Written by
Sajni Shah
Consumer expert on money and utilities
Last Updated
19 MAY 2023
4 min read
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Can you pay a mortgage with a credit card?

Most UK mortgage lenders won’t accept a direct mortgage payment made with a credit card.

If you need to use your credit card to pay your mortgage, it implies that you don’t have enough money in your bank account and you’re struggling financially. This is a red flag to lenders. From their point of view, you’re essentially building up credit card debt to pay off another debt and there’s a greater risk that you’ll fall into arrears.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Why would I want to use a credit card to pay my mortgage?  

There’s a couple of reasons why you might think about paying your mortgage with a credit card.

You don’t have enough money in your current account to cover your mortgage repayments. But borrowing more money by using a credit card isn’t the answer as it could lead to a more serious debt issue.

You’re trying to spend a certain amount on a new card to earn an introductory bonus. Or you might be trying to maximise points on your rewards card.

It’s never a good idea to go into debt on a rewards card, as the interest rate will be very high. These cards work best if you clear the debt each month – any interest charged will quickly wipe out the value of the reward.

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

Many mortgage providers don’t accept mortgage payments made with a credit card. You usually have to set up a direct debit when you take out a mortgage.

Your lender will have carried out rigorous checks on your finances. They wouldn’t have approved your application if they thought that the only way you could pay was to borrow more.

Some lenders might accept a credit card payment in exceptional circumstances, but it’s generally not allowed.

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

Even if your mortgage lender accepts 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.

If it’s not seen as a cash advance, you’ll still need to clear what you owe by the due date to avoid interest charges – unless you have a 0% credit card.

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 with them about your situation, rather than falling into arrears. 

They may be able to help by giving you a payment holiday, where you stop making payments for a while. This might give you the breathing space you need to get back on track.

Another option could be to extend the length of your mortgage to make your monthly payments more manageable. But you’re likely to pay more interest in the long run.

Think about downsizing

You may be in a position to sell your current home and pay off your mortgage. That way, you could take out a smaller mortgage on a more modest home or property in a more affordable area.

Tell your lender if you’re facing financial difficulties and intend to downsize. They may give you time to sell your property.

Use your mortgage protection insurance 

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, 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: 

Citizens Advice
England: 0800 240 4420
Scotland: 0800 028 1456
Wales: 0800 702 2020
Northern Ireland: 0800 915 4604

National Debtline
0808 808 4000

0800 138 1111

They’ll be able to check if there are any benefits or entitlements you might be able to claim and give you information that will help you decide on a plan of action.

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?

If you have a good history of mortgage payments, it can help build your credit score.

But if you try to pay your mortgage on credit 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’ – and that’s not good.

A missed mortgage payment 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 other credit card, in the future.

If you miss a mortgage payment, it’s vital you contact your mortgage lender as soon as possible. They’re obliged to treat you fairly and should offer you an alternative payment option.

What 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. Even HMRC offers an option to pay tax bills by credit card.  

Looking for a credit card?

Compare credit cards quickly and easily. Use our eligibility checker to find a credit card deal that suits you – and find out if you’re likely to be approved without it affecting your credit score.

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Sajni Shah - Consumer expert on utilities and money

Sajni is passionate about building products, allowing Compare the Market to help you make great financial decisions. She keeps track of the latest trends and evolving markets to find new ways to help you save money.

Learn more about Sajni

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