[Disclosure: Cards from our partners are mentioned below.]
Credit card signup bonuses usually come with, well, credit cards. But a new offer from Chase touts beacoup points for (wait for it) … getting a mortgage.
Yup, you’re reading that right: Now through Aug. 6, the bank will award 100,000 Ultimate Rewards points to existing Sapphire, Sapphire Preferred and Sapphire Reserve credit cardholders who finance a new home with Chase.
What’s behind the offer? Chase’s being pretty upfront about the fact that it’s courting millennials, who, despite a reported reluctance to sign up for credit cards, displayed a significant interest in the premium Sapphire Reserve Card the bank launched last summer.
“Half of Chase Sapphire customers are millennials, many of whom are looking to buy their first home now or in the near future,” Pam Codispoti, president of Chase Branded Cards, said in a press release.
A Mortgage for Credit Card Points?
Chase’s offer is eye-popping, but right off the bat, it’s important to note that you don’t want to rush into a mortgage just to score credit card rewards points, no matter how lucrative that part of the deal might seem. Home loans are an expensive proposition on the front-end — where you’ll have to cover a down payment, closing costs, possible points and other expenses — and the backend — where you’ll locked into a monthly mortgage payment and paying plenty of interest most likely for the next 15 to 30 years. (Plus, you know, you’ll have a house to take care of and maintenance isn’t exactly cheap.)
Even if you were already looking into home loans, remember, the rate’s really the thing. The allure of credit card rewards points shouldn’t dissuade you for shopping around for the best mortgage deal you can net. (You can get an idea of where your credit might land you by viewing two of your scores for free on Credit.com.)
Per Chase’s website, the annual percentage rate on its 30-year fixed-rate mortgage is 4.094%. That’s competitive. Chase’s big bank counterparts Wells Fargo and Citi quote APRs on comparable 30-year fixed-rate mortgage products as 4.275% and 4.086%, respectively, on their websites. (Note: Rates are subject to change and the points you may be required to pay will vary.) But that’s not to say someone with good credit couldn’t score a lower rate or better overall deal at another financial institution, smaller bank or local credit union. It’s still wise to do your research and crunch the numbers to be sure you’re getting the best mortgage. The prospect of credit card rewards should be, at best, an afterthought.
The Nitty Gritty
That being said, if you do have good credit, are looking for a mortgage on a new home and have a Sapphire credit card in your wallet, Chase’s offer could be worth looking into. The exact value of the points will vary, depending on what card is in your wallet and how you ultimately choose to redeem them, but 100,000 points can translate to some significant dollars.
You may recall that when the Chase Sapphire Reserve (full review here) launched last summer, it touted a 100,000 bonus point offer equivalent to $1,500 when redeemed for travel through Chase’s Ultimate Rewards. The card, which also comes with a hefty $450 annual fee, currently carries a 50,000-point signup bonus (equivalent to $750 in travel) if cardholders spend $4,000 in the first three months.
As far as the new mortgage offer details go, it applies only to residential first mortgage purchase loans submitted directly to Chase. You’ll have to have had a Sapphire card prior to May, 7, 2017 launch date to be eligible, so no need to rush out and apply for any new plastic.
Cardholders only get the bonus points if their loan is fully approved and they close on the home. (Points will get automatically posted to the primary cardholder’s account within 10 weeks of closing.) The offer is not transferable, limited to one per property at a time, and could be discontinued without notice, the bank says on its website, where you can find more offer details.
Meanwhile, if you are currently looking for a new home, we’ve got 50 things house hunters should do ahead of their search right here.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.