Overpaying mortgage with a credit card

firsttimemover

I have a mortgage with Santander.

They have confirmed (several different advisors) that I can make overpayments to my mortgage account using a credit card. He said this is processed in the same way as making a purchase, but couldn't confirm what merchant code it would go under for my CC to identify.

Has anyone done this? Is it really treated as a purchase not a cash transaction by the CC provider?

For either cashback or 0% cc deals, this would seem appealing so I'd be surprised if someone hasn't at least tried!

The adviser at Sainsburys CC (I have a 0% purchases card) seemed insistent that you cannot pay debt with debt, so weren't able to confirm how the transaction would be treated as they didn't know it was possible. Santander say that overpayment is "good debt" so you can pay by CC, but you can't pay "bad debt" in this way if you are in arrears, for example.


(My apologies if this is bad MSE etiquette to post again, I asked a similar question yesterday, but confused the situation by talking about a product fee, so I am hoping this description is clearer and more people might have experience of this scenario)

Mortgage_Adviser

Why don't you do a test overpayment by say £10 and see what code it goes under and you get any charges from credit card provider.

foxy-stoat

Use the money transfer option and overpay the mortgage that way. You will unlikely be able to make a "purchase" payment on your mortgage anyway seeing as you cannot pay a loan off with a credit card and use the 0% purchase deals.

firsttimemover

Mortgage_Adviser wrote: »

Why don't you do a test overpayment by say £10 and see what code it goes under and you get any charges from credit card provider.

I had thought of this, but Santander only allow a minimum one off overpayment of £500.

firsttimemover

I'm beginning to think it's just not worth the risk.

I just find it so odd that Santander offer up this as a payment method by default...it wouldn't have occurred to me that it would be possible.

HonestS

I was just reading about this, it’s called CC stoozing.

firsttimemover

HonestS wrote: »

I was just reading about this, it’s called CC stoozing.

Exactly! Which is why I was hoping by posting on here someone would say "Yes that's perfectly normal, I do it all the time!" as stoozing is pretty popular on here.

But the responses have pretty much reinforced my opinion that it's bizarre that Santander let you (and encourage you to) do this.

getmore4less

firsttimemover wrote: »

I had thought of this, but Santander only allow a minimum one off overpayment of £500.

are you sure, they should take any payments to the mortgage account.

https://www.santander.co.uk/info/mortgages/overpayment

takes £100

https://www.santander.co.uk/uk/mortgages/managing-your-mortgage

has this on the page.

1 No minimum overpayment amount applies.

nicholbb

Before doing this, how would you pay the card off if you needed to?



I'm doing the same slowly. I do all my spending on a 0% card, then put the payments against the mortgage, I will max the card in a year and have another year before paying back. My mortgage is offset so can easily pay the balance back.

firsttimemover

That’s interesting about minimum overpayments, they always insisted a minimum of £500 before, I wonder if that’s changed in the last few years? I found it annoying that you had to call up to tell them what you wanted to do, decrease the capital or the term every time, so it made sense if it’s that admin-heavy not to accept small amounts!

Of course, I’d always make sure that I’ve either got the cash there or a sufficient savings vehicle there to pay the card off at the end of the term, it’s just better sat in my account gaining interest!

But for the risk of Sainsbury’s charging 3% plus interest from day one it isn’t worth the risk (I need to pay the product fee on my new deal this way in the next few days, so no time to do test payments and wait for them to go through now) - it would be really interesting to know for future though. I only tend put transactions on my 0% card that don’t accept Amex (I prefer the cashback) so mortgage overpayments would be a good way to do this if it’s possible, as 95% of my spending is accepts Amex now.