Mortgages 'should not be paid by credit card'

Date:Wednesday 11th March 2009
Author: Rachel Fletcher

Mortgage holders in difficulty have been warned not to try to meet costs by drawing cash on credit cards to deposit into their accounts.

The Independent's House Doctor made a response to a reader who was considering this strategy for meeting mortgage payments.

Richard Morea of mortgage brokers London & Country warned against it, saying it was "a surefire way to come a cropper".

He said that instead, homeowners in difficulty should contact their lenders as soon as possible and reassured them that mortgage providers are not keen to go down the long and expensive road of repossession.

"There are plenty of other options you can consider," he said.

In addition, the newspaper drew attention to high charges incurred by making cash withdrawals on credit cards.

Meanwhile, it was widely reported earlier this week that thousands of tracker mortgage holders are not paying any interest following the Bank of England's rate cut.

Ray Boulger of John Charcol mortgage expert firm said that lenders should pay interest to borrowers where appropriate.