Use 0% Credit Cards to Overpay Mortgage

superbsaver

I wanted to sense check this idea. All hypothetical at this stage but I am thinking of it.

If you borrow £3000 on a Credit Card with say 0% for 12 months, then use the £3000 to overpay on your mortgage, you would benefit from immediate benefits from the mortgage interests? Meanwhile, the £250 per month that is supposed to repay the CC bill of £3000 within 12 months could go into the best savings account (ISA or otherwise) to get savings interest? At the end of the 12 month term, the savings repay the CC and the mortgage continues £3k less. Of course, best with savings account that has no penalty access in the event you need the money asap to repay the CC? You could also switch the CC debt to another 0% deal and rollover?

Forgive me if this is common as I know all you guys are so savvy, but wanted to check if there were any blatant holes in this strategy that I had not spotted.

Long time reader of the MSE but seldom post.

salau2

I would consider. 1, would the cc provider class this as a cash advance or discount this for 0% promo? and 2. would mortgage provider charge you for paying with cc?

CLAPTON

first thing ; will your mortgage company accept payment by credit card; most won't

superbsaver

I have never used a CC before hence my ignorance with them, but surely transfer / withdraw the funds from the card into your bank account and make the transfer to the mortgage from there?

CLAPTON

superbsaver wrote: »

I have never used a CC before hence my ignorance with them, but surely transfer / withdraw the funds from the card into your bank account and make the transfer to the mortgage from there?

what credit card do you have

some CCs allow a BT into your bank a/c (typical fee 3-4 %) and no interest for a promotional period i.e. MBNA stable but most don't

if you withdraw cash from a CC (i.e. from a ATM) you usually pay a 3% fee plus a very high (over 25% APR) rate of interest



so it depends upon your card and exactly what promotional deal they are offering.

superbsaver

OK. Makes it less viable then with fees for cash or BT. Suppose I would need to check the specific terms with the CC provider.

Glad I posted and thanks for the info

CLAPTON

superbsaver wrote: »

OK. Makes it less viable then with fees for cash or BT. Suppose I would need to check the specific terms with the CC provider.

Glad I posted and thanks for the info

there was once a time when stoozing was a good deal; but with the introduction of fees and the general lowering of interest rates it's become very difficult to make (or save) any money

ICHAPMAN

superbsaver wrote: »

If you borrow £3000 on a Credit Card with say 0% for 12 months, then use the £3000 to overpay on your mortgage, you would benefit from immediate benefits from the mortgage interests? Meanwhile, the £250 per month that is supposed to repay the CC bill of £3000 within 12 months could go into the best savings account (ISA or otherwise) to get savings interest? At the end of the 12 month term, the savings repay the CC and the mortgage continues £3k less.

I'm probably missing something obvious, but you don't mention that you would still be required to meet a monthly minimum payment to the CC company.

Iain

jonesMUFCforever

Can I also ask at the end of the promotional period how OP will get the funds 'back' to repay the credit card?