How to Pay a Mortgage

How to Pay Your Mortgage

You can pay your mortgage in a range of ways, some of which are automatic and some of which require you to initiate the payment each time. Below are the top pros and cons for each.

Online

Paying online is the most convenient way to make a mortgage payment, especially if you set up autopay through your lender's or servicer's mobile app or online dashboard. That will ensure you never pay late or miss a payment.

Phone

You can also call your lender's customer service line and make a payment over the phone. You'll need to provide your bank account information if you're paying from a different financial institution.

Mail

Another option is to mail a payment, enclosing both a check for the amount due and any forms required by the lender that include your account information and the amount due. This may be a coupon or portion of your billing statement; follow your lender's guidelines to be sure.

Credit Card

Mortgage lenders don't typically accept credit cards directly as a method to pay your mortgage. In general, that's a good thing. Making payments with a credit card carries the potential for going into credit card debt and incurring interest charges and fees—which could make your mortgage more costly overall.

If you want to earn credit card rewards or make use of a card's promotional 0% introductory APR offer, you can use a third-party service to make a mortgage payment for a fee. Or you could buy a money order or cashier's check with your credit card that you use to pay your mortgage. These options come with high fees that likely cancel out any perks you could earn.

Automatic Transfer

Sometimes called an ACH transfer, an automatic withdrawal allows for a direct debit of your mortgage payment from your bank account. You can set this up through your mortgage lender or through online bill pay at your bank. It is likely less prone to error if you set up the transfer so the lender deducts it from your bank (via autopay), rather than sending it from your bank to your lender (via online bill pay). That way, the correct amount reaches your lender if your mortgage payment amount changes.

In Person

If your lender is a financial institution with branches in your area, you can make a payment in person or set up your preferred payment option in person (such as automatic transfer).

What Is the Best Way to Pay Your Mortgage?

There is no best way to pay a mortgage. The ideal choice for you depends on your personal needs and preferences, including your comfort with setting up online accounts at your financial institutions. Also, not all lenders offer the same payment options. Some may have robust apps that facilitate online payments, while others have a strong brick-and-mortar presence in your area that allows for easy in-person payments.

The most important element of paying your mortgage is to do so on time. Typically, your first mortgage payment is due on the first day of the second month following closing (November 1 if closing took place on September 5, for example). You have some flexibility if your payment arrives a few days late: Mortgages generally come with a grace period of 15 days after the due date, meaning your lender won't charge you a late fee if the payment arrives within that window.

Mortgage calculator

How to Pay Off Your Mortgage Early

Paying off your mortgage early could save you a significant amount of interest. But whether you should do so is another question.

For example, you could earn higher returns by investing the extra money you'd put toward your mortgage, or you may need it for emergency savings instead. It's also crucial to double-check whether your lender charges a prepayment penalty before paying off your loan early.

If you decide to put extra money toward your mortgage, use these strategies:

• Make a lump-sum payment. When you have the extra cash, such as after receiving a tax refund or work bonus, make an additional payment online, over the phone, in person or through the method you typically use.
• Make biweekly payments. If your lender allows it, opt for biweekly payments, which split your monthly payment in two. This automatically leads to making one extra monthly payment each year, which helps to pay down your principal.
• Increase your monthly payments. Round up your monthly payments or add an extra amount to your recurring payment that you can afford. This way, you're regularly putting more toward the loan without a second thought.

Frequently Asked Questions

The Bottom Line

Choose the mortgage payment method you're most comfortable with and that will most support you in making all payments on time. Since your payment amount may change over time, it's key to ensure the amount you're paying is up to date, which means paying online or by direct debit may be most effective. But as long as you stay on track with timely payments, the way you do it is up to you.