What’s the Better Choice: Refinance or Home Equity
Mortgage rates are on everyone’s mind these days. We saw the last of the historically low rates that drove the pandemic housing boom in early 2022. Rates climbed from an average of 3.22% to a high of 7.08% by early 2023. They peaked at 7.79% before beginning to level off last year.
The good news is that 2025 has seen a slow but steady improvement in rates. The average purchase rate in November of 2025 is 6.38%, and refinance rates are slightly higher. The competitive housing market has slowed in most of the country, with homes staying on the market between 47-62 days. Pricey bidding wars and heartfelt letters from potential buyers are largely a thing of the past.
So, when should you consider refinancing? The short answer is, when you have enough equity and when you can shave at least one point off your rate. For homeowners who paid 8-9% in 2023, today’s rates are absolutely worth the expense and effort of a refinance.
Heritage Grove is currently offering a rate of 6.25% APR¹ on refinances that qualify². Assuming a rate of 8% on a loan of $300,000, you would be paying approximately $2,202 before taxes and insurance. With the promotional 6.25% rate your payment drops to $1,848. That is a savings of $354 a month.
What if you secured a loan at one of those historically low rates, but you want to take cash out of your home? That is where a home equity loan or line of credit comes in. You can tap into your home’s equity without losing the rate on your primary mortgage. A home equity loan is also much more streamlined than a refinance, typically taking two to three weeks.
Questions? Call and speak to a Real Estate Loan Specialist at 503-588-0211 option 4. Or schedule a call here.
Written by: Elena Christian
Read more mortgage posts:
Steps to Prepare for Buying Your First home – And Why It Matters in the End
Back to Basics – Homeownership FAQs
Happy Retirement! Now What Can Your Home’s Equity Do for You?
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APR – Annual Percentage Rate.
The promotional offer is for purchase or refinances on primary residences in Oregon. Second/Vacation Homes, Rental Properties and Manufactured homes are not eligible. Minimum loan amount is $25,000. Rate applies to borrowers with a credit score of 680 or higher. Maximum loan to value (LTV) is 80%. The loan amount and Annual Percentage Rate you receive is based on your credit rating, loan-to-value of property and loan term. Loan origination fee is 1% of the loan amount; appraisal fee and other closing costs and fees may apply. With a loan amount of $300,000 at 6.25% for 30 years, the estimated principal and interest payment would be $1,847.81. The estimated payment does not include real estate taxes or homeowner’s insurance premiums. All loans are subject to credit and property approval. Offer expires December 31, 2025. Offer subject to change without notice. Contact Heritage Grove for more details.