credit card to pay morgage. good value?

russjacks

I am at the moment on a fixed rate morgage at 4.99%, i can pay off up to £4700.00 a year extra with no penalties.
My credit card at the moment has a offer on 0% for a year, money transfare with a 4% charge.

QUESTION does anyone think its worth using my credit card to pay xxx amount off my morgage (pay the balance within the year) which saves me .99% intrest.

Example pay off £3000 saves me 4.99% approx £120.00,
£3000 off my credit card at 4% cost me £90.00

A saving off £30.00.

Or is it 4.99% for the life of my morgage, ie 13 years, so the saving is greater.

ps i can afford the extra payments it would cost me on my card.

Many thanks.
Russ.

russjacks

On the morgage calcalator I have put in a one off payment of £3000 at 4.99% over 13years and it comes up with a saving of £2582.

If this is a true saving and it will only cost me £90.00 in chargers on my credit card, surly thats a good deal.

Or am i being rather thick and missing something.

Sugarhunny1

Bump Bump as I would also like to know if this would be a good idea :-)

Sugar xxx

somethingcorporate

The saving is only for the 1 year because you have to shell out to cover the credit card so seems like a lot of effort for £30!

It would be less hassle just paying it straight off the mortgage.

laurel7172

You aren't comparing like with like.

The £90 doesn't save you the money, it's the overpayment on your mortgage that does that.

So what you're saving is the 0.99% difference between what £3000 costs you on the card and in your mortgage account, amplified by the fact that you could put the lump sum in at the beginning of the year, less the charges.

Now, I reckon that if you paid what you were planning to pay off the credit card into your mortgage account each month, at the end of the year you would have paid around 75 quid in interest.

Or, you could pay the £90, pay the £3k into your mortgage account and save £75.

Sorry, I don't think this is a stooze that adds up. But maybe somebody else will calculate differently.

dimbo61

This has been asked before IE can you pay the mortgage payment with a credit card ?
Some lenders will not allow payment with a credit card ( so you need to check with your lender)
If you took £3000 out on a credit card as a cash advance you will pay more like 15/16% and pay interest from day one ( this is why you NEVER order foreign exchange and pay for it by CC )
If you got a 0% CC card and used it to do all your spending each month for a couple of months and put the same amount into a mortgage reserve account ( where you can take the money back out!) this might work

russjacks

Thanks for all your replys,
You know when you keep looking at things and you can't get them out of your head, but deep down there something telling you there is a easier way of doing it. sometimes you need to write it down to see it clearer.
This is one of those.
It would cost me £250 a month to pay off the £3000 of the card within the 0% year,
If i just pay of £250 a month off my morgage i dont have to pay the 4% card charges.

Simples.

Many thanks. all.