How to pay a mortgage: 5 ways to pay on time

Paying your mortgage on time helps you build equity in your home. It can also improve your credit score and keep you from falling behind on your mortgage. Many lenders offer multiple ways to make a mortgage payment, such as paying online or over the phone.

How to pay a mortgage

Your mortgage payments are due on a monthly basis (although you can choose to make payments more frequently). To keep on top of these payments, it’s important to use the payment method that works best for you. Here are five ways to pay your mortgage and what you should know about each.

1. Pay your mortgage online

The easiest option for most homeowners is to pay for their mortgage through either their lender or servicer’s website. Making a mortgage online payment is fast, free and efficient. Plus, paying online means you can decide when you want to make the payment, maintain a record of when you made it and ensure that you pay it by the due date. Some lenders also have free mobile apps where you can access your account online and pay your mortgage from your phone.

“Going to your lender or loan servicer’s website and making the payment puts you in control of the timing,” says Greg McBride, CFA, chief financial analyst for Bankrate. “The downside is that this is something else each month you need to do or be reminded to do.”

2. Pay your mortgage with automated withdrawals

Choosing automated withdrawals pulled from your checking or savings account is another easy option to make sure you pay your mortgage on time each month. This means your lender automatically withdraws the mortgage payment from your bank account on a specific day each month.

You can set up this option through your lender’s website. Once it’s in place, the payments will repeat each month. This works especially well if you have recurring deposits on a set day, such as a payroll or government check.

“Automatic payments via ACH withdrawal are the easiest way to make the monthly mortgage payment,” says McBride. “It happens without the homeowner needing to take any action and it can happen even if you’re away on vacation and completely unplugged. The only downside is for those that have trouble with overdrafts as you need to make sure the money is in the account and available for immediate withdrawal each month when the payment is taken out.”

To take advantage of this option, go to your lender’s website and create an account. Next, choose the date when you want the withdrawals to occur every month. You can then log in to see when your servicer credited the payment.

One disadvantage of this route is that you might not be able to easily change the payment withdrawal date, especially at the last minute.

Still, setting up automated withdrawals can help homeowners who want to make additional or biweekly payments to pay off a mortgage early and cut the total interest they pay over the loan term.

3. Pay your mortgage using a credit card

Making mortgage payments by credit card can be tempting, especially if your card offers great rewards or substantial cash back. Unfortunately, many mortgage lenders are not fans of this option.

“Most lenders won’t accept credit card payments for the mortgage and the services that do offer the ability to pay via credit card tend to charge a service fee that offsets the value of any rewards you’d be earning,” says McBride.

Check with your card issuer (American Express, Mastercard, Visa, Discover) first. While Mastercard allows mortgage lenders to accept debit and credit cards for payments, Visa has only given the green light for mortgage lenders to take Visa debit and prepaid card payments. With some cards, you have to  go through a third-party payment platform (and if you do, there’s a transaction fee, as McBride notes, that’ll likely erase the value of any points or cash back you earn).

Problems and emergencies, such as an illness or job loss, can and do happen, however. Until you get back on your feet, paying your mortgage with a credit card could be your only option. But you should probably consider it a one- or two-time method.

4. Pay your mortgage by phone

Making a mortgage payment over the phone is another option, especially if you forgot to mail in your payment before the due date or have not set up a payment process online.

You can find the phone number to call on your monthly bill or online. Before you dial, be prepared with your mortgage account number and your banking information, such as the routing and account numbers.

Payments over the phone are typically credited to your account quickly. Before you make the payment, though, ask your servicer if there is a charge for this convenience.

5. Pay your mortgage in person or by mail

If your mortgage servicer is local, the company might accept payments by check or money order in person. Money orders are secure payments since they do not include any personal information. But they have one major drawback: The amount of a money order is often limited to between $700 and $1,000.

Another option is to use a certified check or a cashier’s check, which do not have a limit.

When mailing a check, make sure you include your account number on the check. Just having your home address might not be sufficient, even if it matches the address your servicer has on file.

Sending a payment by mail, however, means you have to consider the time it takes to mail your payment and for the servicer to process it.

Tips to always pay your mortgage on time

To ensure you always pay your mortgage on time, consider setting up autopay from your bank account and, if you haven’t already, arranging for direct deposit so your paychecks get sent there. Keep in mind that most mortgage payments are due on the first of the month.

You might also choose to get ahead by prepaying your mortgage. This strategy has the added benefit of reducing your loan principal faster. (Just be sure to tell your lender you’d like the extra amount to go toward the principal, not the interest.)

What if I’m late making a payment?

If you know you’ll be late making a mortgage payment, reach out to your mortgage servicer as soon as possible. Explain your situation and see if the servicer can work with you and waive any late fees. Communicating proactively can go a long way.

Note that there is typically a grace period for late payments, too — usually 15 days.

If you know you’ll be unable to make a mortgage payment for several months, ask your servicer for forbearance. With forbearance, your servicer can reduce or pause your mortgage payment entirely for a set time. If the problem is permanent, ask your servicer for other relief options such as a loan modification. Most servicers are willing to work with borrowers to ensure they continue to make mortgage payments on time.

Frequently asked questions about paying your mortgage

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  What is the structure of your mortgage payment?

  Your mortgage payment is made up of four parts: principal, interest, taxes and insurance. If you have a conventional loan, you’ll need to pay for private mortgage insurance (PMI) if you put down less than 20 percent of the home’s purchase price. An FHA loan also requires mortgage insurance premiums with less than 20 percent down.
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  Should you make biweekly mortgage payments?

  If you have the extra cash, making biweekly mortgage payments — which amounts to 13 full monthly payments per year instead of 12 — can help you pay off your loan faster and save on interest costs. But this isn’t the best idea for everyone. If you have other high-interest debt to pay off, for example, your extra cash might be better served paying down that debt first.

Bottom line on making mortgage payments

If you’re more disciplined, you can make your mortgage payment manually every month. But setting up automatic payments is a good approach because it saves you the effort of remembering to make a manual payment each month and helps you avoid late payments. If you run into financial problems, you can always cancel the automatic payments to try and pay the bill another way.