Most mortgage lenders do not accept credit card payments directly
Your mortgage lender almost certainly will not let you swipe a card at their payment window or enter card details on their website. Fannie Mae and Freddie Mac, which back the majority of mortgages in the United States, prohibit lenders from accepting credit card payments. Private lenders and portfolio lenders (banks that keep mortgages on their own books rather than selling them) sometimes allow it, but this is rare enough that you should call your lender first and ask directly rather than assume.
The reason lenders avoid credit card payments is straightforward: they want to know the money is actually there. A credit card payment is a promise to pay later, not a payment now. If you miss the credit card bill, the lender gets nothing, and they have no recourse against you beyond what the card issuer does. A bank transfer or check represents money that has already left your account.
Even if your lender does accept credit cards, the transaction usually costs you money in fees, and the math almost never works in your favor.
Key Takeaways
- Most mortgage lenders prohibit credit card payments outright, so calling your lender to ask is the only way to know if yours allows it.
- If your lender does accept credit cards, they typically charge a processing fee of 2 to 3 percent, which on a $2,000 mortgage payment costs $40 to $60.
- A credit card cash advance is a separate transaction from a payment and carries its own fees and interest rate, usually higher than your card's regular rate.
- If you are short on cash for a mortgage payment, contacting your lender about a temporary forbearance or payment plan is a better option than using a credit card.
How third-party payment processors work around the ban
Some companies offer to process your mortgage payment "using" a credit card, but what they actually do is take your credit card information, convert it to cash (usually via a cash advance), and send that cash to your lender. You are not paying the mortgage with the card directly — you are borrowing cash against the card and then paying the mortgage with that cash.
This matters because a cash advance is not the same as a regular credit card purchase. Cash advances typically carry a higher interest rate than your regular card APR — often 5 to 10 percentage points higher. They also charge an upfront fee, usually 3 to 5 percent of the amount advanced. On a $2,000 mortgage payment, that is $60 to $100 before interest even starts accruing.
The processor also takes a cut. Most charge 2 to 3 percent on top of the cash advance fees. So on that same $2,000 payment, you are paying $40 to $60 to the processor, plus $60 to $100 in cash advance fees, plus interest at a rate higher than your regular purchases. The total cost can easily exceed $150 to $200 for a single payment.
When a lender does accept credit cards directly
A small number of lenders, usually private or portfolio lenders, do accept credit card payments without requiring a cash advance. When this happens, the lender charges a processing fee to cover the cost of accepting the card. This fee is typically 2 to 3 percent of the payment amount.
On a $2,000 mortgage payment, a 2.5 percent fee is $50. On a $3,000 payment, it is $75. These fees add up quickly if you use a credit card for multiple payments. Over a year, paying your mortgage with a card at a 2.5 percent fee costs you $600 to $900 in fees alone, depending on your payment amount.
The only scenario where this might make sense is if you are earning credit card rewards that exceed the fee. If your card offers 3 percent cash back on all purchases, and your lender charges a 2.5 percent processing fee, you net 0.5 percent. That is $10 on a $2,000 payment — not nothing, but also not worth the complexity or the risk of carrying a credit card balance.
Why using a credit card for your mortgage is usually a bad idea
Even if the math works out to a small gain, paying your mortgage with a credit card introduces unnecessary risk. If you miss a credit card payment, your credit score drops when ready. If you miss a mortgage payment, you have a grace period (usually 15 days) before it is reported to the credit bureaus. Missing a mortgage payment is also the first step toward foreclosure, so the stakes are much higher.
Paying your mortgage with a credit card also means you are borrowing money to pay a debt you already owe. If you do not have the cash for your mortgage payment, the problem is not that you need a credit card — it is that you need to talk to your lender about your options. Most lenders have programs for temporary hardship that do not involve borrowing more money.
There is also the psychological trap: if you are comfortable putting your mortgage on a credit card, you might be comfortable putting other things on it too. Before long, you have a large balance, high interest charges, and a mortgage payment you still have to make. You have not solved the cash flow problem; you have made it worse.
What to do if you cannot make your mortgage payment
If you are short on cash for a mortgage payment, contact your lender before the payment is due. Do not wait until you are late. Most lenders have a forbearance program that allows you to pause or reduce your payment for a set period — usually three to six months — while you get back on your feet. Forbearance does not forgive the payment; it defers it, meaning you owe it later. But it keeps you current and protects your credit score.
Some lenders also offer a loan modification, which is a permanent change to your loan terms. This might mean extending the loan term to lower your monthly payment, or rolling missed payments into the loan balance. A modification takes longer to set up than forbearance, but it can provide lasting relief if your income has dropped permanently.
If your lender will not work with you, or if you are facing foreclosure, contact a HUD-approved housing counselor. These counselors work for nonprofits and are free. You can find one through the Department of Housing and Urban Development website or by calling 1-800-569-4287. A counselor can negotiate with your lender on your behalf and may know about programs specific to your state or situation.
The difference between a credit card payment and a cash advance
Understanding the difference matters because they cost different amounts and carry different risks. A credit card payment is when you use your card to purchase something and the charge appears on your statement. A cash advance is when you use your card to borrow cash — either at an ATM, at a bank, or through a third-party processor — and that cash is when ready added to your balance at a higher interest rate.
If you use a third-party processor to "pay" your mortgage with a credit card, you are taking a cash advance, even if the processor makes it sound like a regular payment. The processor takes your card information, borrows cash against it, and sends that cash to your lender. You pay the cash advance fee, the higher interest rate, and the processor's fee. Your lender receives cash and has no idea a credit card was involved.
If your lender accepts credit cards directly, you are making a regular credit card purchase, and the only extra cost is the processing fee the lender charges. This is cheaper than a cash advance, but still more expensive than paying by bank transfer or check.
Frequently Asked Questions
Can I use a rewards credit card to pay my mortgage and earn points?
Only if your lender accepts credit cards directly and the rewards rate exceeds the processing fee. Most lenders charge 2 to 3 percent, so your card would need to earn at least that much to break even. Even then, you are paying a fee to earn rewards, which is the opposite of how rewards usually work. It is not worth the added complexity.
What if I use a balance transfer card with 0 percent interest?
A 0 percent introductory rate does not change the fact that you are borrowing money to pay a debt you already owe. You still pay the cash advance fee (3 to 5 percent) and the processor fee (2 to 3 percent) upfront. After the 0 percent period ends, any remaining balance is charged interest at the regular rate. This is a more expensive way to borrow than a personal loan or a line of credit.
Will paying my mortgage with a credit card hurt my credit score?
It can, indirectly. If you carry a balance on the card to pay your mortgage, your credit utilization goes up, which lowers your score. If you miss the credit card payment, your score drops significantly. The safest approach is to pay your mortgage the way your lender intends: by bank transfer, check, or automatic withdrawal from your bank account.
What if my lender says they accept credit cards but charges a huge fee?
Some lenders charge 3 percent or higher. At that rate, paying your mortgage with a credit card costs you $60 to $90 per $2,000 payment. It is almost always cheaper to take out a personal loan at a bank or credit union, even at a higher interest rate, because you pay the interest only on the amount you borrow and only for the time you carry the balance. A mortgage payment fee is a one-time cost that does not go toward paying down any debt.
Can I pay my mortgage with a debit card?
Some lenders accept debit card payments, and a few accept them without a fee. Call your lender to ask. A debit card payment is safer than a credit card because the money comes directly from your bank account, so there is no risk of carrying a balance or missing a payment. If your lender accepts debit cards, this is a better option than a credit card.