Mortgage-Closing Homeowner Slams Holiday Loan Ad as Exploitative

"This just seemed to be trying to take advantage of people."

A homeowner who is close to paying off their mortgage said a holiday-themed marketing pitch from their lender left them angry and uneasy, calling it a predatory tactic.

Here's what to know

In Reddit's r/mildlyinfuriating, the homeowner said they are only two years away from becoming mortgage-free. They were then surprised to get a mailed advertisement from their lender urging them to refinance their home ahead of holiday expenses.

The ad said, "Holiday planning shouldn't bring financial stress. Unlocking your home equity through a refinance can give you the flexibility to consolidate high-interest debt or cover upcoming seasonal expenses," and included a picture of a couple decorating a Christmas tree.

Other commenters said they felt the same way about the flood of advertising.

"That's wild. PSA: Never use your home's equity for consumer debt," one commenter wrote.

"I lost respect for my community credit union years ago when they started pushing VACATION LOANS all over their branch and in mailers," another added.

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More background

Some commenters pointed out that lenders make money by lending, but the original poster and others objected to the way customers are encouraged to borrow for nonessential purchases. They said that approach can leave people vulnerable to foreclosure if they cannot repay the debt.

"I only use home equity loans for major home projects, like (so far) repairing the roof and redoing my driveway. Things that actually improve the value of the home," one person said.

Rough estimates from Siteefy suggest that the average consumer may encounter as many as 10,000 ads a day, though shopping and browsing habits affect the total. That kind of exposure can push people toward spending on things they do not need, while also adding to waste and pollution.

In this case, the homeowner said they would simply keep making mortgage payments rather than take the offer.

"I get it, financial companies need to loan money to make money, but this just seemed to be trying to take advantage of people," the original poster concluded.

Where can I learn more?

These stories look at mortgage payoff decisions, downsizing, equity release, and the risks tied to rising mortgage payments.

• A 73-year-old with $200,000 in savings faced questions about paying off a mortgage versus keeping cash.

• A U.K. family owing £165,000 considered downsizing to go mortgage-free before their rates reset.

• A U.K. mother nearing 60 considered equity release, prompting warnings about depleting her home equity.

• U.S. homebuyers turned to riskier mortgage products as higher interest rates drove applications down.

• In the U.S., 150,000 adjustable-rate mortgage borrowers could face rates doubling and payments jumping $1,080.