“So often we speak of the evil of credit cards. How they’re high interest rates are going to keep you locked into debt for years to come, and how they’re considered “bad” debt in the finance world. But let’s be realistic. There are times when having a credit card to fall back on can be a lifesaver. And if you’re going to miss a Canada mortgage payment, having some plastic could be one of those times. But before you start planning on paying off the rest of your Canada mortgage with that card, there are a few things you should know.
First, check with your Toronto mortgage broker. Not all lenders allow mortgage payments to be paid with a credit card so, it might not even be an option for you – but it still could be. In these situations, sometimes third parties will take the payment for you (such as another bank,) and will forward the payment to your Canada mortgage lender. It’s important to remember that if you’re going to use this kind of payment system for your mortgage, you’ll most likely be charged a fee by the third party. So in short, you’ll be paying more for that payment than you need to. Not so bad if you’re going to miss the payment altogether otherwise, but definitely not something you want to do every month.
It’s important to note that, even if you don’t have to go through a third party, you’ll always be paying for your mortgage payment than you have to when you’re using a credit card to pay it off. This is because not only is there interest on your Canada mortgage, but you’re also paying interest (probably much higher interest) on that credit card. So you’re paying for interest twice when normally, you’d only have to pay it once.
But there are some advantages to paying off your Canada mortgage with a credit card. The first and most obvious is that it might allow you to make a payment when you’d otherwise miss one. And paying a little bit of interest in that case is definitely not as bad as defaulting on your mortgage, and possibly ending up in foreclosure.
Another, lesser-known advantage to paying off your Canada mortgage with your credit card is that you might also be eligible for some cash-back or bonus rewards that your credit card offers. This will of course, allow you to get money back or some really nice bonus prizes, just for using your credit card. Obviously you wouldn’t get these perks just by paying your mortgage payment with cash.
So, is it a good idea to pay off your Canada mortgage with a credit card? Maybe, if the situation is dire and you have no other options. Mostly though, it’s wise to just continue paying your mortgage payments by cash or cheque and save yourself the headache of all that interest and extra fees. “
