Paying mortgage loans with your credit card through CardUp

The CardUp Team Jul 27, 2021 4:30:00 PM
Paying mortgage loans with your credit card through CardUp

Homeownership is undoubtedly one of the most exciting (and also expensive!) milestones in one’s life. Taking into consideration this biggest and lengthiest financial commitment, it is definitely worth finding out a little more about every detail about mortgage loans. 

In Singapore, several financial institutions provide mortgage offers on both private and Housing and Development Board (HDB) led housing properties. One can also apply for loans for under-construction properties or properties that are up for resale. All in all, there are many options available for homebuyers in Singapore to get home loans based on their preferences.

Types of mortgage packages in Singapore

Mortgage loans are typically classified into two types: Fixed rates and Floating rates.

As far as fixed-rate home loans are concerned, the interest rate for agreed contractual periods never changes whereas floating-rate bank loan interest rates may fluctuate according to an index. One of the widely known floating rate loans is Singapore Interbank Offered Rate (SIBOR) packages. Loans under SIBOR packages are more transparent since they are associated with a published index. The other floating rates are determined by individual banks.

Now, financial institutions in Singapore provide mortgages based on properties. The mortgages based on fixed or floating rates are decided on the property you are looking for. Taking into account the types of mortgage loans and properties, the typical mortgage loan classification is then as follows:

  • Fixed-rate mortgage for HDB
  • Floating home loan for HDB
  • Fixed-rate mortgage for Private Properties
  • Floating home loan for Private Properties
  • Home loan for Buildings Under Construction (BUC)

 

Paying mortgage loans with credit cards

Currently, Singaporean homeowners can make mortgage loan repayments via cash, CPF account or a combination of both. While using your CPF is a popular payment option for mortgage loans, there are also certain cases where it makes more sense to not use your CPF balance, and use other payment means instead. 

Credit cards, on the other hand, are traditionally not accepted. However, this has now changed with our introduction of Mortgage Loans as a new payment type! 

CardUp is an online credit card payments platform that enables you to shift your cash, cheque and bank transfer payments to your credit cards, even if your recipients do not accept cards. This lets you enjoy the benefits of paying with your credit cards, such as earning rewards on this spend, as well as the convenience of making these payments online anytime, anywhere.

Mortgage loans are one of these payments, and here’s an example of how much you could be saving when you make this payment with your credit card using CardUp.

 

How much can you earn on your mortgage loan payments with CardUp?

For example, you are looking to buy a 5-room HDB based on the median cost of about $430,000. In this case, a mortgage loan from the bank can cover up to 75% of the value of the property, translating to a total loan of $322,500. The maximum period for any home loan in Singapore is 25 years at an annual interest rate of about 2.2%. If we consider these stats, loan payment boils down to $1,399 per month.

 

Home Value $430,000
Mortgage Loan Amount $322,500
Interest Rate 2.2% (per annum)
Loan Repayment Period 25 years
Monthly Instalment Amount $1,399
Annual Instalment Amount $16,788

(Calculated using the CPF Mortgage Calculator)

 

Earning air miles on your mortgage loan payments

Imagine you’re putting these monthly installments through CardUp instead, using your favourite air miles card (check out our list here!):

Monthly Amount $1,399
Monthly CardUp Fee (2.5% per transaction $31.50
Monthly Earn (1.4 miles per dollar) 2,002 air miles

 

After just 19 months of mortgage payments, the miles earned would be sufficient for a return business class flight to Bali, Indonesia worth $1,154, while you’ve paid just under $600 in fees - almost just half the price! 

If you wish to save up even more miles, after just 4 years, you’ll earn 96,000 air miles, enough to exchange for a return business class ticket to Tokyo, Japan worth $3,455, with just $1,512 paid in fees - savings of over 56%.

 

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Earning cashback on your mortgage loan payments

One of the most popular cashback cards in Singapore is the UOB One Card, and for good reason. By spending $2,000 monthly for all 3 months in each quarter, you will be able to earn 5% cashback disbursed at the end of each quarter. One struggle that most cardholders face however is that they can’t hit this minimum threshold. 

By shifting your mortgage loan and other payments onto your credit card using CardUp however, you’ll more likely be able to hit this spending threshold. Here’s an example:

Payment Type Monthly Amount
Mortgage Loan $1,400
Income Tax $100
Insurance $300
Education Fees $100
Electricity Bills $100

 

By scheduling all 5 payment types on your UOB One Card using CardUp, you’ll essentially enjoy a 5% discount on all these payments above automatically each month via cash rebates! 

This adds up to $840 in savings on your mortgage loan each year, or over $21,000 over the course of the entire loan tenure! 

Want to know if your preferred credit card is eligible for rewards to be earned? Check out our list here!

 

Lady smiling with credit card

How do you pay mortgage loans on CardUp?

1. Sign up for a free CardUp account

If you're an existing CardUp user, log in to your account.

Log in or sign up for CardUp

 

2. Set up a new payment

Select Mortgage Loan from the list of payment types.

Select Mortgage Loan from the list of payment types.

 

3. Create a new recipient

Enter the recipient bank details for the Loan Repayment Account. This can either be:
    1. The bank account indicated by your loan provider to pay directly to, or
    2. A bank account that you have set up a GIRO arrangement to pay from

Enter the recipient bank details for the Loan Repayment Account

 

4. Set up your payment

Enter your payment details and a payment reference (loan policy number and your full name) to be shown on your creditor’s bank account statement. You can also set up your payment on a monthly recurring schedule easily to save you more time each month.

Set up your payment

 

5. Enter your card details

Select or add a new credit card to be used for this payment. Two business days before the Payment Due Date, your credit card will be charged for your payment amount plus a CardUp fee.

Select or add a new credit card

 

6. Upload documents

Upload your Mortgage Loan Agreement and proof of your loan repayment account (either a bank statement or an acknowledgement of a GIRO arrangement)

Upload documents

 

7. Review, sit back and earn rewards

Review your payment, click on ‘Confirm’ and you’re good to go!

Review payment details

 

Your payment will be sent to the recipient directly (or your Loan Repayment Account) on the Payment Due Date automatically.


 

Once the entire process is completed, the financial lender will receive the payment via bank transfer, with the payment reference that you've entered while setting up your payment (your loan policy number or full name) clearly stated. With this information, the recipient will be able to reconcile your payment.

With this new payment type introduced on our platforms, you will be able to rack up even more miles faster. Know of someone who’s paying mortgage payments? Refer them to CardUp and earn with each new user you bring onto CardUp

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