Why consider paying a mortgage with a credit card?
Due to the associated risks and fees, most lenders do not allow the direct payment of a mortgage via credit card. Some third-party services allow you to make mortgage payments with a credit card, but they often charge a fee that can severely outweigh the benefits.
However, increasing your balance can be beneficial for earning credit card rewards or meeting spending requirements for sign-up bonuses. It is crucial to consider the impact this can have on your credit utilization and the potential risk of high interest fees.
How to pay your mortgage with a credit card
Most banks don't accept credit cards for mortgage payments, and you often can't pay your lender directly with a card. Using a processing service, you can still earn points on your rent and mortgage payments. These platforms let you pay with a credit card and send a bank transfer or check to your landlord.
Most of these platforms charge a fee, though there are ways to reduce or eliminate these fees. Here's a look at each service and what you'll pay to earn points on rent and mortgage payments.
Plastiq
Plastiq lets you pay your mortgage and rent with a credit card for a 2.85% fee and accepts most major issuers. It is unique because it runs regular promotions that waive or reduce transaction fees, which can make earning points on rent and mortgage payments much cheaper.
In the past, Plastiq offered discounted fees on payments made with Mastercard. The best way to ensure you don't miss out on these promotions is to opt in to receive email notifications from Plastiq.
Venmo
If your mortgage servicer accepts Venmo, you can earn points on payments by sending the money directly. The only downside is that Venmo charges a 3% fee on credit card transactions. This is really only worth doing if you're trying to meet a credit card minimum spending requirement for a large credit card sign-up bonus. You'd pay a $36 fee on a $1,200 rent payment, for example, which might be worth your while under certain circumstances.
One such situation could be if you're trying to earn a new credit card welcome bonus.
For example, the Chase Sapphire Preferred® Card currently offers a welcome bonus of 60,000 bonus points after you spend $5,000 on purchases in the first three months from account opening. That bonus is worth around $1,080, based on Business Insider's valuation of Chase points, when you transfer points to Chase's airline and hotel partners.
You might find it hard to spend that much money on everyday transactions. But if you're open to paying rent with your credit card and covering the 3% transaction fees, you could hit the spending requirement for your welcome bonus very easily.
Bilt
Bilt Rewards lets members earn points on rent payments, fee-free. Simply join Bilt Rewards and earn 250 points per rent payment made in the app. While Bilt will allow you to earn rewards on your mortgage payment with some lenders, this won't work with every mortgage servicer.
If you're a Bilt Mastercard® (rates and fees) holder, you'll earn 1 point per dollar spent on rent, up to $100,000 a year. And if your landlord doesn't appear in Bilt's extensive database of property management companies, Bilt will still let you pay with a credit card and send a check or bank transfer on your behalf.
You don't have to be a Bilt Mastercard® holder to use the Bilt rewards program. You'll just be limited to earning 250 points per payment and you can't use the bank transfer/check option if your landlord isn't listed in the Bilt network.
The card also lets you earn additional points on everyday spending. It offers 3 points per dollar on dining, 2 points per dollar on travel, and 1 per dollar on rent payments every month (up to $100,000 per year) but cardholders must make at least five purchases per billing cycle to earn rewards on this card. It also lets you earn points on referrals (2,500 points per successful referral), and now every fifth successful referral earns you an additional 10,000 points (up to 50 total successful referrals).
When you're ready to redeem your points, you can transfer them to 18 airline and hotel loyalty programs, including United MileagePlus and World of Hyatt at a 1:1 ratio.
Overall, both the Bilt Rewards program and the credit card are excellent products, considering they earn valuable rewards in common spending categories with no annual fee (see rates and fees).
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The Bilt Mastercard® is the first credit card to offer up to 100,000 points in a calendar year rewards for paying rent without the transaction fee — and you can redeem your points for travel, merchandise, and more. While it now offers bonus points on dining and select travel, if you're not a renter, you should consider other no-annual-fee rewards credit cards as well.
Bilt Mastercard®- $0 Annual Fee
- Earn 1x points on rent payments without the transaction fee, up to 100,000 points each calendar year
- Earns 3x points on dining
- Earn 2x points on travel
- Earn 1x points on other purchases
- Earn double points on the first of each month (excluding rent, up to 1,000 bonus points)
- Use the card 5 times each statement period to earn points
- Earn up to 5x Bilt points on Lyft rides when you link your Bilt account and pay with your Bilt card
- Point redemptions include airlines, hotels, future rent payments, credit card statement credits, toward a down payment on a home, etc.
- Select "Apply Now" to learn more about the product features, terms, and conditions
Choosing the right credit card to pay your mortgage
If you're looking to pay your mortgage with a credit card, you'll want to choose a card that offers maximum rewards. If you're considering paying your mortgage with a credit card over the long term, select a card with a high rewards rate on standard purchases, meaning purchases that don't fall under a "bonus category."
If you're considering a short-term strategy, consider a credit card with a generous welcome bonus for new cardholders.
Capital One Venture Rewards Credit Card and Capital One Venture X Rewards Credit Card
The Capital One Venture Rewards Credit Card and Capital One Venture X Rewards Credit Card earn 2 miles per dollar on almost all spending, including rent and mortgage payments.
What's great about these Capital One Venture cards is how flexible the rewards are. You can apply your Capital One miles towards travel purchases made with your card at 1 cent each or transfer them to over a dozen Capital One airline and hotel partners. These partners include Air Canada Aeroplan, British Airways, and Wyndham Rewards, giving you lots of solid options to redeem points for domestic or international travel.
The Blue Business® Plus Credit Card from American Express
The Blue Business® Plus Credit Card from American Express is another underrated yet exceptional rewards card. It earns 2 Amex Membership Rewards points per dollar on the first $50,000 in purchases every year (then 1 point per dollar) and it's a great card to keep in your wallet since it has no annual fee. The only downside is that this is a business card. If you do any freelancing or have a hustle, you can typically qualify for a business credit card, but not everyone likes mixing their personal and business spending.
However, if you don't mind parsing out a single monthly expense from your business card spending, then it can be worthwhile. After all, the value of Amex points is among the highest on the market, with 21 Amex airline and hotel transfer partners.
The World Of Hyatt Credit Card
World of Hyatt is one of the few loyalty programs that still publishes an award chart. That means you can plan and save up for a hotel stay in advance without worrying about whether redemption rates will significantly change when you're ready to redeem points.
The World Of Hyatt Credit Card is an excellent card to charge your rent and mortgage payments to because of its elite status and free night incentives. Cardholders earn two nights toward elite status for every $5,000 spent, plus a free night after each account anniversary valid Category 1-4 hotels — and another free night (Category 1-4) for spending $15,000 in a calendar year.
Top-tier Hyatt Globalist status is incredibly valuable. It offers perks like complimentary breakfast, Club lounge access, and bonus points on paid stays. Not to mention, you earn Milestone awards on your way to top-tier status. Overall, this is a rewarding program that will pay off nicely if you charge your rent and mortgage payments to its co-branded card.
Setting up balance transfers to cover mortgage payments
If you want to pay your mortgage with a card due to cash-flow concerns, consider using a credit card with a 0% APR balance transfer offer as a short-term solution. Using this method, someone might use a 0% APR check to pay their mortgage. These checks almost always incur a balance transfer fee of 3-5%. You'll also want to be sure you'll be able to pay the balance before your intro 0% period ends to avoid interest charges.
Costs and fees associated with credit card mortgage payments
Understanding the added costs of paying your mortgage with a credit card is essential to avoid further financial strain.
Processing fees from third-party payment services
Third-party payment processing services typically charge a processing fee ranging from 2.5% to 3% of the payment amount. Depending on your mortgage amount, these fees can add up quickly, making the costs outweigh any benefits you might be earning.
Interest rates on cash advances
Another factor to consider if you use a credit card for your mortgage payment is how your credit card issuer will code the payment. If your payment is processed as a cash advance, you could face steep interest rates. Interest on cash advances starts to accrue immediately, making paying a mortgage with a credit card especially costly if you don't repay the balance immediately.
Evaluating potential rewards vs. fees
Comparing the value of any rewards you'll earn to the total cost of using a credit card for a mortgage payment should always be your first step. For example, earning 2% on a payment with a cash-back credit card with a 3% fee leaves you at a loss. If the costs outweigh the value of the rewards you'll earn, it doesn't make sense to use a credit card to pay your mortgage.
Alternatives to using a credit card for mortgage payments
If paying your mortgage with a credit card isn't ideal, alternative options are available. However, these may involve fees, so it's important to compare your options.
Personal loan options
Taking out a personal loan with a lower APR than your credit card can be a more cost-effective way to cover mortgage payments if you don't have the liquid funds to cover the cost. However, it's important to ensure that you can repay the loan on time to avoid incurring high interest charges.
Balance transfer cards
Using a balance transfer card that offers a 0% introductory APR allows you to transfer high-interest debt onto that new card, so you can pay it off without incurring interest during the promotional period.
Be cautious, however, because most balance transfer cards charge a fee of 3-5% of the amount transferred. You'll also have to factor in the cost of using a third-party platform that lets you pay the mortgage with a credit card. Lastly, paying off the card in full before the promotional rate expires is essential to avoid further interest payments.
Home equity loans or lines of credit (HELOC)
A HELOC might offer lower interest rates for covering mortgage payments compared to credit cards. However, you must apply for and be approved for a HELOC, so it's not necessarily an easy or simple alternative route to take.
Potential benefits of using a credit card for mortgage payments
Especially if you're looking to maximize your credit card rewards, there are several benefits to using a card to pay your mortgage, even though there aren't many options to do so.
Earning rewards or cash back on payments
Earning rewards on mortgage payments can justify spending extra on fees and other costs. You can earn points, miles, or cash back on your large mortgage payment using a rewards credit card.
Meeting spending thresholds for bonuses
Large mortgage payments can help you quickly meet credit card bonus spending requirements after you get a new card. This may make it easier to justify paying the processing fees associated with making mortgage payments with your credit card for a few months rather than long term.
Managing cash flow and payment timing
Paying with a credit card can provide temporary flexibility if you're in a cash flow bind. This should be a last resort, and you should ensure you can pay your credit card in full before your grace period ends. Accruing interest on a mortgage payment will quickly increase your housing expenses.
Potential drawbacks your mortgage with a credit card
The biggest disadvantage to paying your mortgage with a credit card is that you will usually incur fees. Plastiq, for example, generally charges 2.85% of the payment. These types of third-party service fees can negate any potential rewards earned from credit card points or cash back.
It's not impossible to earn 3% back on some cards to cover the fee. Discover credit cards have a Discover Cashback Match™ program for the first year of card membership, which doubles your amount of rewards and can make 3% obtainable. Transferable point cards can also offer outsize value on redemptions.
Calculate whether your rewards or benefits will outweigh the service fees charged. If you're unsure what a point or mile is worth for the card you're considering, check out our detailed guide to credit card points and miles valuations.
Also note that you might incur high interest charges if you cannot pay off the credit card balance in full. With average credit card interest rates of over 20%, debt can spiral out of control. Do not consider this strategy for point accumulation if you're unable to pay off your credit card each month in full.
Additionally, high balances relative to your credit limit can negatively affect your credit score. Keeping high balances on your credit card can signal to lenders that you may be struggling to manage your finances.
FAQs on paying your mortgage with a credit card
Can you directly pay a mortgage with a credit card?
No, paying a mortgage directly with a credit card is impossible because lenders don't allow it. To do so, you must use a third-party platform.
Is it safe to pay my mortgage with a credit card?
Paying your mortgage with a credit card can be safe if you use a trusted third-party platform. The real risk of using a credit card to pay your mortgage is carrying a balance and accruing fees and interest.
What are the fees for using a third-party service?
Services that facilitate mortgage payments with credit cards typically charge a fee of around 2.5% to 3% of the payment amount.
Will paying my mortgage with a credit card affect my credit score?
Paying your mortgage with a credit card can affect your credit score if you consistently carry a high balance. This can harm your credit utilization ratio and lower your score.
Are there rewards benefits for using a credit card to pay a mortgage?
While specific mortgage rewards are rare, many credit cards offer general cash back, points, or miles that can be earned through third-party payment services.
Are there alternatives to credit cards for paying a mortgage?
There are several alternatives to using a credit card to pay a mortgage. These include automatic withdrawals (ACH payments), direct bank transfers, and personal checks. Some lenders may also accept money orders or cashier's checks. Generally, there are no fees associated with using these payment methods.
What should I do if I can't cover the credit card balance after paying my mortgage?
If you can't cover your credit card balance after paying your mortgage, consider seeking financial advice to explore options such as balance transfers to cards with lower interest rates, setting up a payment plan, or other strategies.
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
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