Most mortgage lenders do not accept credit card payments directly
Your mortgage lender almost certainly will not let you pay your monthly mortgage bill with a credit card. Mortgage servicers are set up to receive payments by bank transfer, check, or sometimes online bill pay from your bank account — not by credit card. If you try to pay with a credit card, the payment will be rejected at the lender's payment portal.
That said, you can move money from a credit card to your bank account and then pay your mortgage from there, but this route costs money and creates real risks. Understanding what those costs are, and when this move might make sense, matters before you try it.
Key Takeaways
- Mortgage servicers do not accept credit card payments directly, so you cannot charge your mortgage bill to a card through your lender's website or phone line.
- You can transfer money from a credit card to a bank account using a cash advance or balance transfer, but both charge fees — typically 3 to 5 percent of the amount moved.
- Using a credit card to fund a mortgage payment can damage your credit score because it raises your credit utilization and counts as a cash advance, which reports as a separate debt.
- If you are short on cash for a mortgage payment, contacting your lender about a loan modification or forbearance is usually cheaper and safer than using a credit card.
How to move money from a credit card to your bank account
If you decide to move credit card funds to your bank account, you have two main routes: a cash advance or a balance transfer.
A cash advance lets you withdraw money from your credit card at an ATM or through your bank. The card issuer charges a fee — usually 3 to 5 percent of the amount, with a minimum fee of $5 to $10 — plus a higher interest rate than your regular card purchases. That interest starts accruing immediately, with no grace period. If you withdraw $5,000, you might pay $150 to $250 in fees alone, plus interest from day one.
A balance transfer moves money from your credit card to another account, usually your bank account. The fee is similar — 3 to 5 percent — and interest rates are typically lower than a cash advance but higher than regular purchases. Some cards offer a 0 percent introductory period on balance transfers for 6 to 12 months, which can reduce the interest cost if you pay the balance down quickly.
Once the money is in your bank account, you can pay your mortgage normally. Your lender will not know the funds came from a credit card.
The credit score damage from using a credit card for mortgage money
Using a credit card to fund a mortgage payment hurts your credit score in two ways. First, moving money out of the card (whether by cash advance or balance transfer) reduces your available credit, which raises your credit utilization ratio — the percentage of your total credit limit you are using. A higher utilization ratio signals risk to lenders and can drop your score by 10 to 50 points or more, depending on how much you move and what your current utilization is.
Second, a cash advance reports to credit bureaus as a separate type of debt, not a regular purchase. Lenders view cash advances as riskier than purchases, so this can further lower your score. A balance transfer may not report separately, but the fee and interest still cost you money.
The damage is temporary — your score will recover once you pay down the balance — but it can affect your ability to borrow for other things in the short term, and it costs you money in fees and interest while you wait.
When a mortgage modification or forbearance is a better option
If you are short on cash for your mortgage payment, your lender has programs designed for exactly this situation. A loan modification changes the terms of your mortgage — usually lowering your monthly payment by extending the loan term, reducing the interest rate, or adding unpaid interest to the loan balance. A forbearance temporarily pauses or reduces your payments for a set period (usually 3 to 12 months) while you get back on your feet.
Both of these cost you nothing upfront. Your lender may add the missed or reduced payments to the end of the loan, but there is no fee to ask. Contact your mortgage servicer's loss mitigation department — the number is usually on your statement — and ask what options are available to you. Many servicers have streamlined this process and can give you an answer within days.
A modification or forbearance also does not damage your credit the way a credit card cash advance does. Missing a payment damages your credit; using a credit card to avoid missing a payment damages it differently but still damages it. The lender's own programs are designed to minimize that damage.
Why credit card companies make this hard on purpose
Credit card issuers charge high fees and interest on cash advances and balance transfers because they know people use them when they are desperate. The fees are legal and disclosed, but they are structured to be expensive — the 3 to 5 percent fee plus interest means you are paying the credit card company to borrow money you already have access to, just in a different form.
Mortgage lenders do not accept credit cards partly because they want to avoid this trap for borrowers, and partly because credit card payments are reversible (a cardholder can dispute the charge), while bank transfers are not. A mortgage servicer wants certainty that the payment will stick.
What happens if you miss a mortgage payment while trying to use a credit card
If you are planning to use a credit card to make a mortgage payment, do not wait until the last day of the grace period. The cash advance or balance transfer takes time to process — usually 1 to 3 business days for the money to reach your bank account, then another 1 to 2 days for your bank to process the payment to your lender. If something goes wrong in that chain, you could miss the deadline.
A single missed mortgage payment reports to credit bureaus and can trigger late fees from your lender. After 30 days, it appears on your credit report. After 120 days, your lender can begin foreclosure proceedings. Using a credit card to avoid a missed payment only works if the money actually reaches your lender on time.
If you are already behind on payments, contact your lender before you try any workaround. Many servicers have programs for borrowers in arrears, and using a credit card will not help you catch up faster than those programs would.
Frequently Asked Questions
Can I use a credit card to pay my mortgage through a third-party payment service?
Some third-party payment processors claim to accept credit card payments for mortgages, but they charge a fee — usually 2 to 3 percent on top of the credit card's own fees. This makes the total cost 5 to 8 percent or more. Your mortgage servicer does not endorse these services, and using one does not change the fact that you are moving money from a credit card at a high cost.
Will my mortgage lender know if I pay with a credit card?
Your lender will not know the source of the money if you transfer it to your bank account first and then pay normally. However, if you miss payments and then suddenly make a large payment, your servicer may ask where the money came from, especially if you are in a loss mitigation program. Be honest if asked — lying about the source of funds can disqualify you from assistance programs.
What if I have a rewards credit card — can I earn points on my mortgage payment?
Since mortgage lenders do not accept credit cards directly, you cannot earn rewards on your mortgage payment. Even if you could, the fees and interest would cost far more than any rewards would be worth. A 2 percent cash back reward on a $5,000 payment ($100) would be wiped out by a single cash advance fee.
Is using a credit card better than taking out a personal loan?
A personal loan usually has a lower interest rate than a credit card cash advance, but both are more expensive than asking your lender for a modification or forbearance. If your lender cannot help, a personal loan is often cheaper than a credit card, though you should compare the interest rate and fees on both before deciding.