Can I make a Mortgage Overpayment with a Credit Card?

Biciitalia

Hi I have been overpaying my mortgage for the last 4 months. I am only allowed to overpay by 12000 per year with the Hali@x. I have just been told I can have a Hali@x CC with a balance of 9000 with 0% for 9 months - can I overpay using the card? Any suggestions greafully received.

deefadog

I assume you could, but you would have to pay it back on the card after 8 months. So for eight months you could save interest on that 9k if you could borrow back the money.

A bit of a dangerous game if you ask me, as if anything happened you debt would large with huge interest charges compared to the mortgage.

Biciitalia

Hi my idea was to pay off 8000 on the card paying that back at 1000 per month so it wouldnt go beyond the 0% period - not sure exactly how much I would save in the long run - perhaps safest bet is just to stick to the extra 1500 a month I am currently overpaying.

Floxxie

You may find that you cannot use a credit card to pay a mortgage unless you are in arrears.

The only way to find out is to contact your mortgage provider.

deefadog

Hi my idea was to pay off 8000 on the card paying that back at 1000 per month so it wouldnt go beyond the 0% period - not sure exactly how much I would save in the long run - perhaps safest bet is just to stick to the extra 1500 a month I am currently overpaying.

Hi, then if you do clear the card, then you would save more, but you would have to put that into one of the mortgage spread sheets to see how much you would save.

BexInLondon

You may be able to write a credit card cheque though there is usually a fee for this (mine are 3%).

dimbo61

My lender told me they would not allow me to pay my mortgage with a credit card.
Using a Halifax credit card to pay a Halifax mortgage may be a little too much for the Halifax but nice idea.

snowmen

same here with nationwide - said they would not accept a credit card payment to pay a mortgage payment.

george_jetson

would the cc company not treat this as a cash advance and charge you interest straight away?

chirpchirp

You could possibly pay with credit card cheques. However,the problem with this is they are sometimes charged at a higher rate, my 0% credit card charges 3% on credit cheques. As my mortgage rate is 1.49% it's not worth it for me to pay by credit card cheques.

abouttimetoo

This is a really interesting question to me as with the right terms and conditions from both the mortgage provider and the credit card company it would seem quite innovative and amazing things can be done! I've not done this myself (yet!) but I've followed a few threads on the credit card stooze site and here is what some people have managed to do - remember it very much depends on the T&C's especially whether the card provider treats a mortgage payment as a puchase or a cash advance.

Hopefully I can explain it clearly enough....

Scenario one - stooze money via 0% interest balance transfer and put some or all of it into your mortgage (obviously you must have some means of repaying the balance when it is due as well as being able to afford monthly minimum repayments and establishing that the advantages outweigh any balance transfer fee you may pay

Scenario two - get credit ard that has 0% on both balance transfers and purchases. Make normal - or overpayments - via credit card and have the money in your savings account for longer

Scenario three - as above but the card is also one that has reward scheme e.g. point, cashback etc so that you are also racking rewards up while paying for your mortgage

Scenario four - as above re 0% on balance transfers and purchases - I'll do this one with example figures - say mortgage is £10, 000 and monthly repayment is £x and you have a credit card with a £5000 limit. Make overpayment on cc of £5000 thereby reducing your mortgage capital that month to £5,000 (minus normal payment). Towards the end of that month ring mortgage company to get overpayment back and use to repay creditcard

The last one seems to be absolute genius to my mind but soooooooo many things to thing about and investigate, some of which are

• you need to be super organised
• you need to confirm with your mortgage provider that they will accept cc payments
• you need to confirm with your mortgage provider that they will return overpayments and how quickly
• you need to confirm with your cc company that such transactions will be classed as purchases and not cash advances!

In the last scenario some people seem to be pulling it off successfully although I don't know if the mortage company at some point will get sick of them asking for their overpayments back every month but how clever have they been - they are reducing the capital temporarily and therefore paying less interest AND racking up stuff via rewards on cards

Sorry, bit of a long post - hope that makes sense. Please note I'm no expert and you really need to fully investigate such things