Advice on my one last step to being mortgage free

Stuart_Dobbie

I am in the final stage of being mortgage free and plan to use a 0% credit card to pay last £6K over a year as this will save £250 in interest. Has anyone used this method or know if you can pay a lender with credit card?:j

Welshlassie

There was someone on here that looked at this option, but can't remember theoutcome.

Several questions, some lenders may not take credit card payments to pay off mortgage, so look at something like the Virgin card (16 months 0%) that will allow a transfer into your current account.
How do you know you will get a credit limit big enough to cover the mortgage, credit card companies are cutting back on credit.
Have you considered the balance transfer fee, usually around 3% of the balance, will you still save money (3% of £6,000 is £180, is it really worth doing for £70?)
Good luck with whatever you decide.

Nail_Lad

Not something I'd given much though to until you've just mentioned it. Worth investigating though!

abouttimetoo

Stuart_Dobbie wrote: »

I am in the final stage of being mortgage free and plan to use a 0% credit card to pay last £6K over a year as this will save £250 in interest. Has anyone used this method or know if you can pay a lender with credit card?:j

Hi Stuart

Yes, I've heard of this and also seen it referred to on the Credit Card board. You will need to check the terms and conditions of the card provider as it seems some will class it as a 'normal purchase' e.g as if you used it in a supermarket, and some will class it as a cash advance and charge you accordingly.

As the others have said you consider a balance transfer fee but the ideal scenario for you would be to find a card who has 0% on purchases, will ttreat the transaction to pay off your mortgage as a purchase and then you can pay off your mortgage in one go and then repay the card back over some months.

Good luck

Kaz2904

Don't forget that you will need to have a limit that is higher than you need to BT as often you can only BT up to 95% of your limit.
What interest rate is your mortgage fixed at? Do you have to pay any penalties? Can you overpay?
£500 per month for 1 year is £6000, isn't it worth just overpaying what you can over and above your current payment. Espescially with interest rates as they are at present.

Stuart_Dobbie

the interest is at 4% variable and as I am just paying off £6K it wouldn't be a BT, and paying +/- £430 a month I plan to up payment to £500 x 12 months on the card and avoid the 4% of £6K:j

Kaz2904

If that is your plan then your first step is to contact your mortgage company and see if they will accept a mortgage payment from a credit card (Mine won't, I asked!). If they will, then you need to find a credit card who will actually allow you to make a bill payment without classing it as a cash advance.
Good luck with this plan, I'm only ever so slightly (very) envious!