Using an interest free credit card to pay your mortgage.

nicholaspwright

If I got a credit card that was interest free for 36 months would I be able to use this to pay my mortgage? What sort of percentage of the total are the minimum payments for credit cards?

lee111s

I don't think many mortgage companies would accept credit card payments for mortgage payments. Something to do with paying for credit with credit.

swindiff

You pay for credit with credit when doing a balance transfer?

[Deleted User]

Unlikely your mortgage provider would accept card payments, unless you are in arrears. You would need to check with them.

Minimum payments are 1% of balance plus fees and interest.

grumbler

nicholaspwright wrote: »

If I got a credit card that was interest free for 36 months would I be able to use this to pay my mortgage?

You will - if the card offers 0% on Money Transfers

What sort of percentage of the total are the minimum payments for credit cards?

Why is this of any importance if you have to clear you card balance in 36 months anyway?

jamesd

The minimum payments for the cards I have vary from 1% (Santander) to 2.25% (Barclaycard).

Traditionally the value for money of balance transfers assumes that you do not make any purchases with a card on which you have done a balance transfer but in your situation that would be foolish. Instead, you should make purchases up to the value of the minimum payment a little before the minimum payment is due to be taken. You will pay interest on those purchases at least for the time between purchase being applied to your account and the time the minimum payment is taken. This will be a trivial amount compared to the benefit to you of effectively getting to borrow the minimum payment money for the rest of the 0% deal term.

Sometimes, if convenient, it's also worth doing a month or two in advance for a bigger purchase. The total interest cost rises but even at 1-2% a month it is lower than a normal balance transfer fee, so it remains a good deal at the start of the deal term.

As the remaining 0% rate term drops the effective "balance transfer" cost of these purchases gradually increases until at the end it's not worth doing them because the interest cost even for a few days is greater than the benefit.

So, to maximise the value of your money transfer, do make some purchases, just pay careful attention to the amounts and timing of them to keep the cost of the money as low as possible.

grumbler wrote: »

Why is this of any importance if you have to clear you card balance in 36 months anyway?

You pay a fixed fee for the money transfer. The reducing balance increases the effective cost of the money. Carefully timed spending amounts help to redress that, keeping the amount borrowed close to the original amount, increasing the value of the money transfer or balance transfer.

lee111s

swindiff wrote: »

You pay for credit with credit when doing a balance transfer?

That's different. Balance transfers are designed for that purpose. Credit cards are not meant as a way of paying a mortgage.

jonesMUFCforever

One thing springs to mind how will you repay the credit card at the end of the promotional period?