The Short Answer: Usually Not Directly, But Sometimes Through a Workaround
Most mortgage lenders do not take credit card payments. They want money from a bank account — either a check, an electronic transfer, or an automatic debit. If you try to give your lender a credit card number, they will turn it down. The reason is straightforward: credit card companies charge a fee (usually 2 to 3 percent) for processing the payment, and mortgage lenders do not want to pay that cost.
That said, you can move money from a credit card to your bank account and then pay your mortgage from there. The catch is that this move costs you money and can damage your credit score. It only makes sense in narrow situations — usually when you are behind on your mortgage and need a few weeks to find other money.
Key Takeaways
- Your mortgage lender will not accept a credit card directly, but you can transfer money from a credit card to your bank account and then pay from that account.
- A cash advance from your credit card costs 3 to 5 percent upfront plus a higher interest rate than regular purchases, making it expensive even for a short-term fix.
- Using a credit card to pay your mortgage will raise your credit utilization ratio, which can lower your credit score by 10 to 50 points or more.
- If you are behind on your mortgage, contact your lender about a loan modification or forbearance before you use a credit card.
Why Lenders Reject Credit Card Payments
When a mortgage lender receives a payment, they want the money to arrive in their bank account with no middleman taking a cut. A credit card company sits in the middle and charges a processing fee — typically 2 to 3 percent of the payment amount. On a $2,000 mortgage payment, that is $40 to $60 the lender would have to absorb. Most lenders have decided that is not worth it, so they straightforward do not accept the method.
Some third-party payment processors will let you pay a mortgage with a credit card, but they charge you the fee instead of the lender. You end up paying the same 2 to 3 percent on top of your regular payment. For a $2,000 payment, you would owe $2,040 to $2,060. Over a year, that adds up to hundreds of dollars in fees for no benefit to you.
The Two Ways to Get Money From a Credit Card Into Your Mortgage Payment
Cash advances are the most direct route. You go to an ATM, a bank branch, or use a check that came with your credit card, and you withdraw cash or transfer money to your bank account. The credit card company charges you an upfront fee — usually 3 to 5 percent — plus interest that starts accruing when ready. There is no grace period like there is for regular purchases. If you take a $5,000 cash advance, you might pay $150 to $250 in fees right away, plus interest at a rate that is often 5 to 10 percentage points higher than your regular purchase rate.
Balance transfers move money from one credit card to another or to a bank account. Some cards offer a low or zero percent introductory rate on balance transfers, which sounds better than a cash advance. But the upfront fee is still 3 to 5 percent, and the zero percent period usually lasts only 6 to 12 months. After that, the rate jumps to the card's regular rate. This method makes sense only if you are certain you can pay off the transferred balance before the promotional period ends.
Both methods put money in your bank account, which you can then use to pay your mortgage the normal way. But both cost you money upfront and charge you interest on top of that.
How This Affects Your Credit Score
Using a credit card to fund a mortgage payment hurts your credit score in two ways. First, the cash advance or balance transfer counts as a new debt on your credit report. Second, and more when ready, it raises your credit utilization ratio — the percentage of your available credit that you are using. If you have a $10,000 credit limit and you take a $5,000 cash advance, your utilization jumps to 50 percent. Credit scoring models treat high utilization as a sign of financial stress, and your score can drop 10 to 50 points or more depending on how high your utilization was before.
The damage is not permanent. Once you pay down the balance, your utilization drops and your score begins to recover. But if you are already behind on your mortgage, a sudden credit score drop can make it harder to borrow money elsewhere or refinance later.
When This Strategy Actually Makes Sense
Using a credit card to pay your mortgage is expensive and risky, but there are a few situations where it might be the least bad option. The first is a short-term cash flow gap — you know you will have money in a week or two, but your mortgage payment is due now. In that case, a cash advance might cost you $100 to $200 in fees and interest, but it keeps you from being late. A late payment stays on your credit report for seven years and costs far more in the long run.
The second situation is when you are already behind and your lender has refused to work with you. Some lenders will not discuss a loan modification or forbearance until you are 30 days late. If you are 20 days late and you have a credit card available, paying with it might buy you time to negotiate. But this is a last resort, not a first move.
The third situation is when you are trying to avoid foreclosure and you have exhausted other options. If you are facing a foreclosure sale in 30 days and you have no other way to catch up, a credit card payment might delay the process long enough for you to find a loan modification, a refinance, or a short sale. Again, this is not a solution — it is a delay tactic while you work on a real solution.
What to Do Instead
Before you use a credit card, contact your mortgage lender and ask about a loan modification or forbearance. A loan modification changes the terms of your loan — usually by extending the term or lowering the rate — so your payment is smaller. Forbearance pauses or reduces your payment for a set period (usually 3 to 12 months) while you get back on your feet. Both are free, and both are designed for situations exactly like yours.
If you are behind on your mortgage, you may also be able to work with a HUD-approved housing counselor. These counselors work for nonprofits and are free to you. They can help you understand your options, negotiate with your lender, and explore for programs you might not know about. You can find one through the HUD website or by calling 1-800-569-4287.
If you need money for a short-term gap and you do not want to use a credit card, look into a personal loan from a bank or credit union. The interest rate is usually lower than a credit card cash advance, and there is no upfront fee. You will still pay interest, but the total cost is often less.
Frequently Asked Questions
What if I use a third-party payment processor to pay my mortgage with a credit card?
Third-party processors will accept your credit card, but they charge you a fee of 2 to 3 percent on top of your payment. You end up paying more than you would with a cash advance, and you get no benefit in return. Avoid this unless your lender specifically recommends a processor and absorbs the fee themselves — which is rare.
Will paying my mortgage with a credit card help me build credit?
No. A cash advance or balance transfer does not count as a regular purchase, so it does not help your credit history. It only raises your utilization and costs you money. If you want to build credit, use a credit card for small purchases you can pay off in full each month.
Can I use a rewards credit card to pay my mortgage and earn points?
Most mortgage lenders do not accept credit cards at all, so this is not an option. Even if a processor lets you do it, the fee you pay (2 to 3 percent) is usually much higher than the value of the rewards you would earn (typically 1 to 2 percent). You would lose money on the deal.
What happens if I miss my mortgage payment while I am trying to get a cash advance?
A missed payment is reported to the credit bureaus after 30 days and stays on your report for seven years. It also triggers late fees and can start the foreclosure process. If you think you will miss a payment, contact your lender when ready — do not wait to see if a cash advance comes through. Lenders are more willing to work with you before you miss a payment than after.
Is a personal loan a better option than a credit card cash advance?
Usually yes. A personal loan from a bank or credit union typically has a lower interest rate than a credit card cash advance, no upfront fee, and a fixed repayment schedule. The downside is that it takes longer to process — usually 3 to 7 business days. If you need money when ready, a cash advance is faster, but it costs more.