Most mortgage lenders won't let you pay directly with a credit card, but you have workarounds
Your mortgage lender almost certainly does not accept credit cards as direct payment. Mortgage servicers are set up to receive checks, bank transfers, or automatic withdrawals — not card payments. If you try to pay your mortgage bill with a credit card number, the payment will be rejected.
You can, however, move money from a credit card to your bank account and then pay your mortgage from there. The catch is that this costs money and counts as a cash advance, which carries higher interest rates and fees than regular purchases. Whether this makes sense depends on your situation and what you're trying to accomplish.
Key Takeaways
- Direct credit card payment to your mortgage servicer is not an option — lenders do not accept this payment method.
- A cash advance from your credit card to your bank account costs a fee (usually 3 to 5 percent) plus a higher interest rate that starts immediately.
- Balance transfer checks, if your card offers them, may have lower fees than cash advances but still charge interest from day one.
- Paying your mortgage with a credit card makes sense only in narrow situations, such as earning a sign-up bonus that covers the fees.
- If you cannot pay your mortgage from your bank account, contact your lender about payment plans or hardship options instead.
How to move money from a credit card to pay your mortgage
If you decide to use a credit card to fund a mortgage payment, you need an intermediate step. You cannot send the card number directly to your lender. Instead, you move money from the card to a checking or savings account, then pay your mortgage from that account using your normal method.
The two main ways to do this are a cash advance and a balance transfer check. A cash advance is a withdrawal of cash or a transfer to your bank account using your credit card. A balance transfer check is a physical check your card issuer mails to you, which you deposit into your bank account. Both move money into your account, but they have different costs.
Cash advances typically charge a fee of 3 to 5 percent of the amount withdrawn, though some cards charge a flat fee instead. Balance transfer checks usually charge 3 to 4 percent. Both start charging interest immediately — there is no grace period like you get with regular credit card purchases. Interest accrues from the day you take the advance or deposit the check.
Why the costs are higher for credit card cash advances
Credit card companies treat cash advances and balance transfers differently from regular purchases because they see them as riskier. When you buy something with a credit card, the merchant guarantees the transaction and the card company knows what you bought. When you take cash out, the card company has no way to track how you use it, so they charge more to offset that risk.
The interest rate on a cash advance is usually 5 to 10 percentage points higher than your regular purchase APR. If your card charges 18 percent on purchases, the cash advance rate might be 25 or 28 percent. This rate applies to the full amount from day one — there is no 21-day grace period. If you take a $5,000 cash advance at 25 percent APR and pay it back in 30 days, you will owe roughly $103 in interest alone, plus the upfront fee.
Balance transfer checks have a lower interest rate than cash advances but higher than purchases. They also start charging interest immediately. The advantage is that the fee is sometimes lower if you have a promotional offer, but you should read the fine print carefully.
When paying your mortgage with a credit card might make sense
Using a credit card to fund a mortgage payment is expensive, so it only makes financial sense in specific situations. The most common one is when you have a new credit card with a sign-up bonus that covers the fees and interest you will pay.
For example, if a card offers a $500 bonus for spending $5,000 in the first three months, and you need to pay your mortgage anyway, you could use the card for regular purchases to meet that threshold instead of using a cash advance. This is different from paying the mortgage directly with a cash advance — you are using the card for everyday spending and paying the mortgage from your regular account.
Another narrow situation is if you are in a temporary cash flow problem and need to buy time before your next paycheck or payment arrives. Even then, this is expensive compared to asking your lender about a payment deferment or modification, which costs nothing.
What to do if you cannot pay your mortgage from your bank account
If you are considering a credit card cash advance because you do not have enough money in your checking account to cover your mortgage, stop and contact your lender instead. Most mortgage servicers have programs for people in temporary hardship, and these programs cost nothing.
Your lender can offer a loan modification, which changes the terms of your mortgage — usually by extending the loan term to lower your monthly payment. They can also offer a forbearance, which pauses or reduces your payments for a set period (usually 3 to 12 months) while you get back on your feet. After forbearance ends, you resume regular payments, sometimes with the missed amount added to the end of the loan.
Some lenders offer a payment plan, which lets you catch up on missed payments by adding a portion of the arrears to your regular payment each month. All of these options are free and do not damage your credit the way a missed payment does. Contact your servicer's loss mitigation department — the number is on your mortgage statement — and explain your situation.
The difference between credit cards and debit cards for mortgage payments
A debit card works differently from a credit card because it draws directly from your bank account. Some lenders accept debit card payments over the phone or online, though many still prefer bank transfers or checks. If your lender accepts debit cards, this is a free way to pay and avoids the cash advance fees entirely.
Check your mortgage statement or log into your servicer's online portal to see what payment methods they accept. If debit card is listed, you can use it without any extra cost. If only bank transfer or check is listed, those are also free options.
Frequently Asked Questions
Will paying my mortgage with a credit card build my credit score?
No. Most mortgage servicers do not report credit card payments to the credit bureaus, so the payment would not show up on your credit report. Your mortgage payment itself builds your credit when you pay it on time from your bank account. Using a credit card as an intermediary adds cost without any credit benefit.
Can I use a rewards credit card to earn points on my mortgage payment?
Not through a direct payment to your lender. If you use a cash advance or balance transfer check, you will not earn rewards — those transactions are excluded from rewards programs. You could earn rewards by using the card for other spending and paying your mortgage from your regular account, but that is different from paying the mortgage itself with the card.
What if my credit card has a 0 percent promotional rate?
A 0 percent promotional rate on purchases does not apply to cash advances or balance transfers. Those transactions are charged the regular cash advance or balance transfer rate immediately, even if your card has a 0 percent offer. Read the terms carefully — the promotional rate almost never covers cash advances.
Is there a way to avoid the cash advance fee?
Not if you are taking a cash advance or balance transfer from your credit card. The fee is built into the transaction. Your only option to avoid it is to not use a credit card at all — pay from your bank account, or contact your lender about hardship programs if you do not have the funds available.
What happens if I cannot pay back the credit card cash advance?
The debt stays on your credit card and accrues interest at the high cash advance rate. If you miss payments, your credit score drops and the card issuer may close your account or sue you. This is why contacting your mortgage lender about a payment plan or modification is a better option — they have programs designed for people who are struggling.