Home loan guide
What your lender, card issuer and payment service allow, what it costs, and where to get help if repayments are getting tight.
If you're asking because this month's repayment looks tight, I'd call your lender before you put it on a card. You'll still owe the money on the card, and the fees and interest can leave you with a bigger problem next month.
Don't assume your home loan accepts credit card payments. The payment methods your lender allows, the bill payment service's restrictions and your card issuer's rules all matter. A BPAY number on its own doesn't mean a credit card is accepted.
Your usual repayment arrangement is with your lender, often by direct debit or bank transfer. NAB, for example, describes setting up home loan direct debits from an everyday banking account. That's different from borrowing money on a credit card to make the repayment.
Before relying on any alternative, get confirmation that the specific home loan payment is allowed, how the card transaction will be classified and when the lender will receive the money. The rules differ between lenders, cards and payment services.
Sources: Australian Payments Plus BPAY support. NAB home loan repayment guidance.
An app that accepts credit cards for some bills doesn't necessarily accept mortgage repayments. Some services exclude payments to banks and other financial institutions in their terms, so check the actual mortgage biller and the service's current terms before you rely on it, rather than a general claim that an app can "pay your bills". We don't recommend any particular provider.
A percentage fee adds up fast on a mortgage-sized payment. As an example, a 2% fee on a $3k repayment is $60. Repeat that every month and it's $720 a year, before card interest or any other charges. That's just the arithmetic, not a quote from any provider.
Cash advances usually come with a fee and interest from the day you withdraw, with no interest-free period. Check your card's terms, because some cards block cash advances altogether.
Don't assume every online bill payment is treated as a cash advance either. Ask your card issuer how the specific transaction will be treated, and check the rate, fees and interest-free conditions before relying on it.
After paying the mortgage, you still owe the card. If you can only cover that by borrowing again, the original shortfall hasn't been fixed.
Points can be worth less than the fees. Say an eligible $3k payment earned 1 point per dollar, and each point was worth 1 cent. That would be $30 in rewards a month, or $360 a year, against the $720 in yearly processing fees in the example above. You'd be $360 behind before interest or other card charges. These are assumed points and values, not a card offer or a way to pay your mortgage. Don't take on card debt just to chase a bonus.
Sources: Moneysmart cash advance glossary. CommBank credit card cash advance guidance.
Even a card you pay off in full can work against you when you apply for a home loan. Lenders look at the limit, not the balance. Most of the lenders we compared count about 3.8% of the limit as a monthly repayment, so an assumed $10k limit counts as about $380 a month and reduces your borrowing power. If you're about to apply, ask us whether lowering or closing a card would help.
Check to see if you are eligible for a home loan
Contact your lender's hardship team early. Explain what has changed, what you can afford right now and whether the problem is temporary or ongoing.
ASIC's Moneysmart says a lender may agree to reduce or pause repayments or change the loan terms. These options depend on your circumstances. They aren't automatic and don't necessarily stop interest.
If your lender says no, it has to tell you why. If you agree an arrangement, it can show on your credit report as financial hardship information. Our guide to hardship flags on your credit file explains how lenders read them later.
Before agreeing to an arrangement, ask what happens to the interest, the amount you owe and your repayments once it ends. Get it in writing.
If you need help with the household budget or dealing with creditors, a financial counsellor can help. The National Debt Helpline offers free financial counselling on 1800 007 007. If you can't resolve a hardship complaint with your lender, Moneysmart explains the next steps, including AFCA.
Source: Moneysmart, problems paying your mortgage.
An offset account is a separate transaction account linked to an eligible home loan. Its balance reduces the amount that's charged interest, but it doesn't pay down the loan itself. For example, a $400k loan with $50k in a 100% offset has interest worked out on $350k. You still owe $400k.
You can have your salary paid into the offset and use it for everyday banking. You don't need a credit card to get the benefit. Compare the interest saved with any account fees or higher loan rate, using the balance you expect to keep there after bills. Check the account is correctly linked and whether the offset is full or partial.
Our offset account guide explains the costs, savings and differences from redraw.
Source: Moneysmart, mortgage offset accounts.
Yes. Keeping money in an offset while putting everyday spending on a card is not the same as paying your mortgage with borrowed card money.
NAB describes an offset strategy where you keep the money for your card bill in the offset, track your spending and pay the card in full by its due date. Any benefit depends on meeting the card's interest-free conditions and keeping fees and spending under control.
If you're already carrying a balance, or you need the card because your income doesn't cover your expenses, this won't fix that shortfall. An offset strategy shouldn't become a reason to spend more.
Source: NAB, setting up your home loan properly.
If your budget has a genuine surplus, paying extra into the home loan can cut your interest and shorten the loan. Check your lender's extra repayment limits and fees first, especially during a fixed rate period. Don't commit money you need for upcoming bills.
Our extra repayment calculator lets you test an affordable amount using your balance, rate and remaining term. It's an estimate, not a promise of savings. For more ideas, see our guide to paying off your home loan faster.
Redraw is different from an offset. It lets you take out eligible extra repayments you've already made, within the lender's rules. Check the available amount, fees and how long access takes before relying on it. Redrawing puts the loan balance back up, so it reduces the benefit of those extra repayments. Our home loan features guide compares the practical differences.
Source: Moneysmart, pay off your mortgage faster.
Would you like to learn about your situation?
If your repayments are affordable but you're wondering whether you're paying too much, a rate review is a more useful conversation than finding a way to put the mortgage on a card.
Compare your existing loan with alternatives over the same remaining term. Include switching costs and any features you really use. A smaller monthly repayment can be misleading if it comes from stretching the debt over more years. Our refinance guide explains the checks to make before switching.
Refinancing still needs lender approval and may not be available or suitable. If you're struggling now, don't hold off contacting your current lender's hardship team while you look for another loan.
If an offer includes points, cashback or bundled products, compare the loan's rate, fees and conditions first. A perk isn't a reason to choose a more expensive loan or take on a credit card you don't need. Treat any benefit as part of the overall cost, not as a way to fund repayments.
Not just because the mortgage has a BPAY biller code. You need to check whether that biller accepts a card-funded payment and how your card issuer treats it. Don't assume it will be accepted, earn rewards or get interest-free days.
Moving borrowed cash around doesn't make the repayment cheaper or fix an ongoing budget shortfall. Cash advance fees, interest and limits may apply under your card's terms. Talk to your lender about assistance rather than treating a cash advance as a regular repayment plan.
As mortgage brokers in Brisbane, we can review your home loan and talk through whether its rate and structure still suit you. We can't guarantee a refinance or approve a hardship arrangement on the lender's behalf. For immediate repayment trouble, contact your lender directly. For independent debt support, speak with a financial counsellor.
General information only. Your lender's and card issuer's current terms apply. This article doesn't recommend using a credit card to fund mortgage repayments.
