Using Credit Card to pay off chunk of mortgage

stoopyftm · 11 October 2017 at 1:20PM

Hi all,

As the title suggests, taking advantage of credit cards balance transfer offers to pay off a chunk of mortgage and duck the interest on it - anybody ever done this, have any advice, pros, cons, pitfalls?

I've a clean MBNA credit card with a 15.5k limit, Im thinking of paying a chunk of this from my mortgage. Would there be financial penalties if I used the card to pay money to a financial institution like when you withdraw money (or would the bank even accept a card payment)

Any advice on the best card to transfer to, obviously the longer the period, lower the % transfer fee, and how much they would give me are the three main points to consider for this, I've got a very good credit rating with no other loans, card debt or other finance apart from the mortgage. I was thinking about Halifax but their offers are for new customers and I already have a Halifax card (nothing on it) and wondered if I could complain as a loyal customer etc etc and maybe could get the terms of the offer, also could offer to open a bank account with them as leverage.

And does anyone know what kind of percentage monthly min fee I would be looking at?

Any other advice please go ahead, even if it's don't do it :-)

Thanks

chappers · 11 October 2017 at 1:28PM

only you can answer that question, too many factors.
credit card rate and if 0% then for how long and what do you do when that ends.?
Mortgage rate?
any transfer fees and if so how much?
Min repayment on CC?
Over what period of time?
How the reduction would affect your mortgage term/mortgage repayments?
can you afford both payments?

without the facts its impossible to comment but gut reaction says that longer term it will be hard to beat your mortgage rate for credit.

Ebe_Scrooge · 11 October 2017 at 1:31PM

I'd be highly surprised if your mortgage provider would accept credit card payments. Even if they did, it would likely be classed as a cash advance, so you'd pay interest on it from day 1.

What may be a possibility would be to get a Money Transfer card, use that to deposit money into your bank account, then pay that towards your mortgage. Just do the sums to see if the Balance Transfer fee would make it worthwhile. And obviously, make sure you pay it off in full just before the promotional period ends.

stoopyftm · 11 October 2017 at 1:43PM

chappers wrote: »

only you can answer that question, too many factors.
credit card rate and if 0% then for how long and what do you do when that ends.?
Mortgage rate?
any transfer fees and if so how much?
Min repayment on CC?
Over what period of time?
How the reduction would affect your mortgage term/mortgage repayments?
can you afford both payments?

without the facts its impossible to comment but gut reaction says that longer term it will be hard to beat your mortgage rate for credit.

Yeah, I understand this, but paying anything off at 0% interest is going to be cheaper than my mortgage whether its reduced term or reduced payments, in the long run. The repayments would be over the length of the card 'offer' usually min 2 years IIRC then anything left transfer to another card

And as long as the repayments aren't more than around £500 pm I can probably afford it, or have the means to take on another couple of shifts if Im struggling.

meer53 · 11 October 2017 at 1:52PM

stoopyftm wrote: »

Yeah, I understand this, but paying anything off at 0% interest is going to be cheaper than my mortgage whether its reduced term or reduced payments, in the long run. The repayments would be over the length of the card 'offer' usually min 2 years IIRC then anything left transfer to another card

And as long as the repayments aren't more than around £500 pm I can probably afford it, or have the means to take on another couple of shifts if Im struggling.

All sounds like a bad idea to me. A lot of "probably maybes" in there !

MallyGirl · 11 October 2017 at 3:21PM

stoopyftm wrote: »

Hi all,

As the title suggests, taking advantage of credit cards balance transfer offers to pay off a chunk of mortgage and duck the interest on it - anybody ever done this, have any advice, pros, cons, pitfalls?

I've a clean MBNA credit card with a 15.5k limit, Im thinking of paying a chunk of this from my mortgage. Would there be financial penalties if I used the card to pay money to a financial institution like when you withdraw money (or would the bank even accept a card payment)

Any advice on the best card to transfer to, obviously the longer the period, lower the % transfer fee, and how much they would give me are the three main points to consider for this, I've got a very good credit rating with no other loans, card debt or other finance apart from the mortgage. I was thinking about Halifax but their offers are for new customers and I already have a Halifax card (nothing on it) and wondered if I could complain as a loyal customer etc etc and maybe could get the terms of the offer, also could offer to open a bank account with them as leverage.

And does anyone know what kind of percentage monthly min fee I would be looking at?

Any other advice please go ahead, even if it's don't do it :-)

Thanks

I do this as part of my stoozing efforts. I have a flexible mortgage so I can always pay the card off at the end of the 0% period if I can't transfer it to another 0% deal. It needs to be a 0% Money Transfer offer, not a balance transfer offer, and they usually have a fee. You need to do the maths to see if the MT fee is less than the mortgage rate you are paying.

The percentage monthly fee depends on the card - some are 1%, some 2%, some 2.5%

Don80 · 11 October 2017 at 3:50PM

stoopyftm wrote: »

I was thinking about Halifax but their offers are for new customers and I already have a Halifax card (nothing on it) and wondered if I could complain as a loyal customer etc etc and maybe could get the terms of the offer, also could offer to open a bank account with them as leverage.

I highly doubt that this would be successful. If you don't use the card or pay it in full every month, you're actually costing them money (in terms of the admin to maintain the account) so you don't really have leverage. Opening a bank account is unlikely to change that either unless you had the account with a high balance for some time, but even then...

It's a bit like me complaining to TSB that I no longer get the contactless cashback as I have had the account for a few years now. I didn't waste my time, I just opened a new account with another bank. You'd be as well just taking out a new card with a different provider.

stoopyftm · 11 October 2017 at 4:44PM

Ebe_Scrooge wrote: »

I'd be highly surprised if your mortgage provider would accept credit card payments. Even if they did, it would likely be classed as a cash advance, so you'd pay interest on it from day 1.

What may be a possibility would be to get a Money Transfer card, use that to deposit money into your bank account, then pay that towards your mortgage. Just do the sums to see if the Balance Transfer fee would make it worthwhile. And obviously, make sure you pay it off in full just before the promotional period ends.

Yeah, thanks, that's not an option I thought of.

stoopyftm · 12 October 2017 at 1:50PM

meer53 wrote: »

All sounds like a bad idea to me. A lot of "probably maybes" in there !

Fair enough I understand that it's not something to be entered into lightly, I work in finance so Ive worked through everything from my end to see if it's feasible, and barring some maybes beyond my control like redundancy etc Im confident I can handle repayments etc.

I was looking more for advice by anyone whos tried this and recommendations on cards etc or where to or not to look.

stoopyftm · 12 October 2017 at 1:51PM

MallyGirl wrote: »

I do this as part of my stoozing efforts. I have a flexible mortgage so I can always pay the card off at the end of the 0% period if I can't transfer it to another 0% deal. It needs to be a 0% Money Transfer offer, not a balance transfer offer, and they usually have a fee. You need to do the maths to see if the MT fee is less than the mortgage rate you are paying.

The percentage monthly fee depends on the card - some are 1%, some 2%, some 2.5%

This is great advice, thank you very much

stoopyftm · 12 October 2017 at 4:58PM

Don80 wrote: »

I highly doubt that this would be successful. If you don't use the card or pay it in full every month, you're actually costing them money (in terms of the admin to maintain the account) so you don't really have leverage. Opening a bank account is unlikely to change that either unless you had the account with a high balance for some time, but even then...

It's a bit like me complaining to TSB that I no longer get the contactless cashback as I have had the account for a few years now. I didn't waste my time, I just opened a new account with another bank. You'd be as well just taking out a new card with a different provider.

Right, I understand thanks. Sounds like Im barking up the wrong tree and money transfer card is the best bet

Using Credit Card to pay off chunk of mortgage

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