Your home loan is probably one of your biggest bills. With the cash back, points or miles you can earn with rewards credit cards, you might be wondering if you can pay mortgage with credit card so you can rack up perks in the process. Even if you have the funds now to pay off your mortgage without needing to charge it to credit, you may want to use a credit card anyway to make your purchase go toward travel pointscash back or another reward. In this post, learn whether or not you can pay your mortgage with a credit card and, if so, how it works.

Can you pay a mortgage with a credit card?

Typically, no, a home loan lender will not allow you to pay debt (your mortgage) with other debt (your credit card). If you ever tried to charge a car purchase to a credit card, you’d likely encounter the same issue.

There is a workaround: working with a third party to make your payments. A 2018 report by CNBC found one couple paid $100,000 of their mortgage with a credit card, earning $2,000 in rewards. They used the service Plastiq, which allows users to make large purchases with a credit card for a 2.5% fee, which goes toward Plastiq taking care of the payment via check, ACH transfer or wire transfer. According to Plastiq’s website, with the potential rewards you can earn (like cash back, savings on debt, early pay discounts and more), you could potentially earn a 5.41% net benefit.

Does it make sense to pay a mortgage with a credit card?

It depends. One reason to do so would be if the rewards outweigh the costs. If you’re going to make more cash back, earn higher travel rewards or gain another perk by using a third-party service to pay your mortgage, then it might be worth it — as long as the benefit is greater than the fee.

Another reason to consider paying a mortgage with a credit card is when you have a credit card that requires a large number of transactions or a high spending limit to get a bonus offer. If you aren’t able to get the bonus with everyday purchases, maybe because you want to use other cards for different rewards, then using a card for a significant transaction like a mortgage payment can help you get closer to the bonus. That said, we should note that it’s best to earn such a bonus by making that card your primary form of payment — using the card to pay all your monthly bills should help you reach or get pretty close to the spend requirement to earn an intro bonus. You may also be interested in paying a mortgage with a credit card to avoid foreclosure (not recommended) or to buy some time to pay off the mortgage without making a late payment to the mortgage company.

The key is to read all the fine print for both your lender’s fees and the card issuer’s fees. Some card issuers will classify a payment with a third-party like Plastiq as a cash advance, which could result in extra fees and throw off your value calculation.

You should also be aware of how making a large purchase on a credit card might impact your credit score. It will increase your credit utilization, which can negatively impact your score. And if you’re not able to pay off your mortgage payment in time for some reason, then you’ll be stuck with more credit card interest fees, which are typically much higher than mortgage interest fees.

Because of the potential downsides or risks you’ll encounter when paying your mortgage with a credit card, this isn’t something we recommend, as we feel the risks outweigh the rewards. Still, if you feel this is the best option for you, keep reading to learn how to pay your mortgage with a credit card.

How to pay a mortgage with a credit card

The most well-known way to pay your mortgage with a credit card, as of February 2020, is Plastiq. The service details the process on its website. We should note that Plastiq offers a referral program that will save you money on part of the processing fee, depending on the amount of your mortgage payment. If you want to pay a mortgage with a credit card through Plastiq, you’ll need a Discover card or Mastercard. That’s because you’re not able to use Visa or American Express cards to make home loan payments.

You can also look at redemption options for your regular credit card usage. The cash you earn with a cash back credit card, for example, can be redeemed as a statement credit that you can use toward your next mortgage payment. If you don’t yet have a cash back credit card but have a mortgage payment, the cash back rewards you get may make using one of these cards worth it, in addition to or instead of a travel card or credit card for rewards. Another way to use your rewards to pay your credit card is by redeeming your cash back for a check or direct deposit into your bank account. You can then use that cash to pay your mortgage.

Make sure you use the right credit card

If you’re looking for a card that allows you to redeem your rewards as a credit on your mortgage, you’ll want to look at the cards offered by your mortgage lender. For example, if your mortgage is with Bank of America, you should look into Bank of America credit cards. This benefit will likely be noted in the credit card’s fine print, so be sure to look there. If you’d prefer a cash back card with the ability to redeem earned cash back for a paper check or direct deposit, our best cash back credit cards page is a good place to start — we note the redemption options at the bottom of every cash back credit card we review.

If you do decide to use Plastiq, you’ll want to make sure you’re using the right Mastercard or Discover credit card to pay your mortgage. You’ll want to calculate the reward value with how much you’ll be paying in fees on your mortgage payment to see if you’ll be in the black. For example, travel credit card rewards systems can be ultra-rewarding but will need to be analyzed and compared to how much fees cost to determine the benefits.

Also, it may make more sense to use a new card for a mortgage to land a bonus offer. You might also consider a card that helps you get closer to a certain status, like an elite status with an airline. Another perk to getting a new card for mortgage payments is that it will increase your total line of credit and may decrease your credit utilization. Both these factors can positively impact your credit score.

Take a magnifying glass to the fine print. Make sure a Plastiq purchase is not regarded as a cash advance with the card you’re thinking about using so you don’t incur extra fees. You’ll also want to triple-check the terms of the card network, the mortgage lender and the card issuer to make sure your mortgage payment will go through. Otherwise, you risk having a mortgage payment declined or making a late mortgage payment, which will cost you extra, too.

Every situation is different

Whether or not you choose to use a credit card for your mortgage should depend on the terms of the financial institutions you’re working with, the rewards you can get and your home loan payment structure. When you can earn rewards with little effort, it makes sense. You might even be able to earn back a mortgage payment or two with some strategic planning. Check out the best credit cards to find the right card for your mortgage payment.