Paying Mortgage Overpayments with Credit Card

ricey420

Hi folks


Hope someone can help.


I have a mortgage with no Early Repayment Charges so I always try to overpay my mortgage by as much as I can. I've been consistently overpaying by £400 per month.



I was thinking about taking out a 0% credit card and using the limit (say around £4,000) towards the mortgage. So it effectively takes £4,000 off the mortgage balance, and then I can pay the card at 0%.


Is this possible and worthwhile? E.g., does it count as a cash withdrawal?

[Deleted User]

Most lenders won't accept card payments unless you're in arrears as there's no benefit in them paying for the privilege of you clearing your mortgage.

Those that do, it's likely to be a cash transaction.

Neutrinno

As zx81 said, I imagine there are few lenders who will accept credit card payments.

[Deleted User]

Isnt it just an awful lot of hassle for such a little gain? At a decent interest rate on the mortgage this overpayment of £4k would save you what? £50 over a year?

Id probably just make sure you have the best interest rate on your mortgage and overpay as you are.

dimbo61

Bad idea so move on.
Most lenders will not except a mortgage payment or overpayment with a credit card.
If they do it maybe seen as a cash withdrawal. Very bad idea

List_Maker

You can't pay off debt with debt. Same goes for final balances on car finance etc.
Only way would be to take a cash advance on a credit card, which could work out if you get a 0% deal. But take with caution, you will need to pay off the money transfer card at the end of the deal, so would need to work out what you save on your mortgage.

foxy-stoat

You need a money transfer card, you will get charged 2 or 3 % on the transaction and be sure that you pay the £4000 in full within the intro rate period, may be 12 or 18 months.

You may save a small amount of interest - very little point though, just overpay the mortgage with the £400 each month you would of paid into the 0% credit card.

If you want to build your credit history for some reason, more hassle than its worth.

muhandis

As others have said, you are unlikely to be able to transfer cash directly from a cc to a mortgage without incurring costs that would easily exceed any savings from overpaying.

To achieve the same effect, you could take out a 0% purchases card, put all your spending on it and use any "savings" to overpay the mortgage every month.

Just to be clear, I am not recommending that you do the above as the question remains as to what would you do when the 0% period comes to an end.

ricey420 wrote: »

Hi folks

Hope someone can help.

I have a mortgage with no Early Repayment Charges so I always try to overpay my mortgage by as much as I can. I've been consistently overpaying by £400 per month.

I was thinking about taking out a 0% credit card and using the limit (say around £4,000) towards the mortgage. So it effectively takes £4,000 off the mortgage balance, and then I can pay the card at 0%.

Is this possible and worthwhile? E.g., does it count as a cash withdrawal?