Whether You Can Pay Your Mortgage With a Credit Card
Most mortgage lenders do not take credit card payments directly. Your bank or loan servicer will reject a credit card number if you try to submit it as payment. However, you have two workarounds: you can use a third-party payment processor that accepts credit cards and forwards the money to your lender, or you can use a cash advance from your credit card to deposit funds into your checking account and pay from there.
The first route costs a processing fee — typically 2 to 3 percent of the payment amount. The second route costs the cash advance fee your card issuer charges (usually 3 to 5 percent) plus a higher interest rate that starts accruing when ready, with no grace period. Neither option is cheap, and both should only be considered if you have a specific reason to use your card's rewards or if you are in a tight spot and need the float time a credit card offers.
Before you proceed, check your mortgage documents or call your servicer to confirm they do not have a credit card payment option you missed. Some servicers have started offering this directly, though it remains uncommon.
Key Takeaways
- Third-party payment processors like Plastiq and LendingClub can forward credit card payments to your mortgage lender, but charge a processing fee of 2 to 3 percent.
- A credit card cash advance lets you withdraw cash and deposit it to your checking account, but costs a cash advance fee plus a higher interest rate with no grace period.
- Your mortgage servicer almost certainly does not take credit cards directly, so you must use one of these two methods.
- Using a credit card to pay your mortgage makes sense only if the rewards rate exceeds the fee cost, or if you need the timing flexibility a credit card provides.
Using a Third-Party Payment Processor
A payment processor acts as a middleman. You authorize the processor to charge your credit card, and the processor sends a check or electronic transfer to your mortgage servicer on your behalf. The most common processors for mortgage payments are Plastiq and LendingClub, though others exist.
To use this method, visit the processor's website, enter your mortgage servicer's name and address, provide your credit card details, and specify the payment amount. The processor will charge your card when ready and typically mail a check to your servicer within 1 to 3 business days, or send an electronic transfer if your servicer is set up for it. You will see the charge on your credit card statement within one to two billing cycles.
The fee is usually a flat percentage of the payment amount — 2 to 3 percent is standard. On a $2,000 mortgage payment, that means $40 to $60 added to your cost. Some processors offer a lower rate if you use their debit card or bank account option instead, but those do not earn rewards and defeat the purpose of using a credit card.
Check whether your card's rewards rate justifies the fee. If your card earns 2 percent cash back and the processor charges 2.5 percent, you are paying 0.5 percent net to use the card. If your card earns 1 percent, the fee costs you money overall.
Using a Credit Card Cash Advance
A cash advance lets you withdraw cash from your credit card at an ATM or bank teller. You then deposit that cash into your checking account and pay your mortgage the normal way. This avoids the processor fee but introduces other costs.
Your card issuer will charge a cash advance fee — typically 3 to 5 percent of the amount withdrawn — and will charge a higher interest rate on the cash advance balance, often 5 to 10 percentage points above your regular purchase APR. Critically, the interest starts accruing when ready. There is no grace period like there is for regular purchases. If you withdraw $2,000 at a 4 percent fee and 25 percent APR, you owe $80 in fees plus interest from day one.
This method makes sense only if you need the cash when ready and plan to pay it back within a few days before interest compounds. If you are using it to float a payment for a week or two, the interest cost will exceed any rewards you earn.
When Using a Credit Card for Your Mortgage Makes Sense
The math works in your favor only in narrow situations. If you have a high-rewards card (3 percent or more) and the processor fee is 2 percent or less, you come out ahead. If you are in a month where you have a large bonus category that covers mortgage payments (some cards offer 5 percent back on certain categories), the fee might be worth it for that one payment.
You might also use a credit card if you are timing a payment to hit a minimum spending requirement for a sign-up bonus. If you need to spend $5,000 in three months to earn a $500 bonus, and your mortgage payment is $2,000, using the processor and paying the $40 to $60 fee is worth it because the bonus more than covers it.
Outside these scenarios, paying your mortgage with a credit card costs more than paying from your checking account. Your mortgage servicer does not report credit card payments to the credit bureaus any differently than bank account payments, so there is no credit score advantage either.
How to Avoid Fees Altogether
If your servicer offers an automatic bank account withdrawal, use that. There is no fee, and the payment is may provide to arrive on time. Set it up through your servicer's online portal or by calling their customer service line. You will need your checking account number and routing number.
If you want to earn rewards without paying a fee, consider using a rewards credit card for other expenses and redirecting the cash you save to your mortgage. For example, if you put your groceries, gas, and utilities on a 2 percent cash back card, you might earn $100 to $200 a month in rewards. Pay that directly to your mortgage from your checking account. You earn the rewards without the processor fee.
Some servicers also allow you to pay online using a debit card at no charge. This does not earn rewards, but it is faster and more flexible than bank account withdrawal if you need to make a payment outside your regular schedule.
What Happens If You Miss a Payment While Using a Processor
If you authorize a payment through a processor and then cancel it or dispute the charge with your credit card company, your servicer will not receive the money. The processor is not responsible for ensuring payment reaches your lender — you are. If the check gets lost in the mail or the electronic transfer fails, your servicer will report the payment as late.
Always allow extra time when using a processor. If your mortgage is due on the 15th, send the payment through the processor by the 10th to account for mail delays or processing time. Do not wait until the due date.
If you are concerned about a payment not arriving, contact your servicer a few days after you authorize it and confirm they received it. Most servicers can tell you within 24 to 48 hours whether a payment has posted.
Comparing Your Options at a Glance
| Payment Method | Fee | Processing Time | When to Use |
|---|---|---|---|
| Bank account withdrawal | None | 1 to 2 business days | Standard payments; no rewards needed |
| Third-party processor (credit card) | 2 to 3 percent | 1 to 3 business days | High-rewards card; bonus category; sign-up requirement |
| Credit card cash advance | 3 to 5 percent plus interest | Same day | Emergency only; pay back within days |
| Debit card (if servicer accepts) | None | 1 to 2 business days | Flexible timing; no rewards |
Frequently Asked Questions
Does paying my mortgage with a credit card build my credit faster?
No. Your mortgage payment history is reported to the credit bureaus whether you pay from a checking account or a credit card. The payment method does not change how the lender reports it. Using a credit card does not speed up credit building and introduces unnecessary fees.
Can I use a balance transfer check from my credit card to pay my mortgage?
Technically yes, but it is a bad idea. Balance transfer checks usually charge a 3 to 5 percent fee upfront and a higher interest rate than regular purchases. You would pay the fee when ready and then pay interest on the balance. This is more expensive than using a payment processor.
What if my credit card has a 0 percent introductory APR?
The 0 percent rate typically applies only to purchases or balance transfers, not to cash advances. If you use a cash advance, you will pay the regular cash advance APR even during the 0 percent intro period. Check your card's terms to confirm. A processor payment counts as a purchase and would may have access to for the 0 percent rate, but you still pay the 2 to 3 percent processor fee upfront.
Will my mortgage servicer report a credit card payment differently than a bank account payment?
No. Your servicer reports only whether the payment was made on time and in full. They do not report the payment method. From a credit reporting perspective, a credit card payment and a bank account payment are identical.
Can I set up automatic credit card payments to my mortgage?
Not directly through your servicer. You would need to set up recurring payments through a third-party processor, which charges a fee each time. Most people find it simpler to set up automatic bank account withdrawal instead, which is free and requires no third party.