Can You Pay Your Mortgage with a Credit Card?

mortgage credit cardYou found your dream house. Now how do you pay for it? Sending off regular checks to your mortgage lender is the most conventional way, but our financial system has leeway for creativity. For example, paying off your mortgage with a credit card is a clever way to earn cash-back rewards and points, but is it possible?

Racking up rewards on your credit card is an easy way to get free or very cheap flights, or redeem points for groceries and gas. Those points and rewards would multiply even quicker if only you could use your credit card to pay off hefty, regular bills like your mortgage. Most financial institutions are not going to go out of their way to suggest paying your mortgage with a credit card, but it’s totally feasible. However, ust not through the traditional sense that you pay off other purchases. Here’s how you do it:

Sign up for a Plastiq account. Plastiq is a website that allows you to pay your mortgage with a credit card. Plastiq doesn’t work with Visa cards. You can only pay with MasterCard, American Express, or Discover cards. Be mindful that although Plastiq is free to use, they make money by charging users a 2.5 percent fee on each transaction. So, if your mortgage is $300 a month, you’ll be paying an additional $7.50.

Use a pre-paid gift card. A PIN-enabled gift card is another easy way to pay off your mortgage using a credit card. Although there are more steps involved than just writing a check, because you’re completing two transactions, in the end, you will still get the points and not have to worry about a surcharge. Walmart, gas stations, and major supermarkets like Publix and Safeway sell PIN-enabled cards and have Bluebird kiosks where you can register and load them with cash. Then you can pay your mortgage.

Sign up with Tio. This bill pay site streamlines and systemizes all of your bills into one spot, and allows you to pay them through PayPal, Visa, Mastercard, Discover, or American Express. It only takes a moment to sign up, and Tio also has partnerships with nearly 100 mortgage finance companies, including Chase, Bank of America, TD Bank, Sallie Mae, JPMorgan, and Citibank. Tio is much faster than going the gift card route, but just like Plastiq, there are fees involved. For example, $1,000 mortgage will result in a 2.85 percent surcharge, which is an additional $28.50. However, fees vary, and it’s best to do some research to figure out if the fee is a worthwhile tradeoff for the potential points or rewards earned.

That being said, it’s important to weigh your options and do the math before you start paying off your mortgage with a credit card. Doing so won’t damage your credit, but you should keep a steady eye on your budget to make sure you have enough funds to cover your statement each month. If you’re an avid traveler or use the points to earn regular cash back, then you could gain serious leverage by using a credit card to pay your mortgage.

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