Mortgages Paid Before Credit Cards Again

A new study carried out by TransUnion has revealed that during the recent economic downturn, borrowers preferred paying their credit card debt before their mortgage debt. Traditionally, the reverse has been the norm. Now the trend has been reversed once again and home payments have become a priority. What does this say about the borrowing and money management strategies of consumers?


The data from 2004, when the property market was on the rise, shows that mortgage delinquency was just 1.26% while the same rate for credit cards was 2.25%. In the heat of the housing market crisis in 2008, the mortgage delinquency was 3.32% while credit card delinquency was 3.29%. The home loan delinquency reached its highest point in 2009 when it was 4.92%.

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The fact that borrowers made credit card payments priority over home loan payments is explained with the housing market bubble burst and the rise in unemployment. Since the values of their homes fell, people preferred to allocate their funds elsewhere. Credit card repayment was a priority since these cards offered quick cash which was used monthly in replacement of lost income.

In 2013, things went back to their original places. The mortgage delinquency was 1.79% while the credit card delinquency was 1.86%. Now with the housing market recovering effectively and the increase in property prices, homes are worth more once again and their repayment brings greater financial benefits to borrowers. The unemployment rate has fallen significantly. It is now 3% lower compared to 2009. This has a positive effect not only on home loan repayment but on credit card repayment as well.

As the economy is recovering effectively from the recession and experiences steady growth, the sky is getting clearer for mortgage borrowers as well. The financial benefits from home loan repayment are getting bigger and this trend is expected to remain.



Mailynne serves as a content strategist and writer for She is ahighly task-oriented strategic planner and experienced writer. Over the past 10 years, Mailynne has managedcontent for both large corporations, non-profits and businesses. She specializes in managing digital marketing,branding and web development content. Mailynne has worked with a variety of local, national and international organizations.


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