Oregon Mortgage Calculator

Factors in Your Oregon Mortgage Payment

Homeowners pay their mortgage each month (principal and interest) and sometimes pay extra into an escrow account. Escrow pays out property taxes and homeowners insurance. Oregon property taxes are below the national average, which is good news for homeowners. This is due to several laws that put tax caps on tax rates and growth.

If you own a home in Oregon, a local assessor will appraise the property annually to determine fair market value. Your tax rate will apply to either the market value or the maximum assessed value, whichever is lower. Oregon law states that maximum assessed value (MAV) can’t increase by more than 3% each year (unless there are changes to the property such as an addition).

The average effective property tax rate in Oregon is 0.82%, depending on where the property is located. School district taxes, included in the average effective property tax rate, are limited to $5 per $1,000 in market value. Overall, effective tax rates in Oregon are limited to 1.5%. Homeowners may also be eligible for a property tax exemption. Oregon boasts over 100 exemption programs so it’s worth seeing if you qualify for reduction in tax liability.

As for homeowners insurance, Oregon again is affordable. In fact, it’s one of the cheapest states in the U.S. for annual premiums, with an average of $1,608 a year, according to data from insurance.com. While the state has relatively few natural disasters compared to states such as Florida and Texas with high flooding and hail risk, Oregon does see significant earthquake activity. Most homeowners insurance policies don’t cover earthquake damage, so 20% of Oregonians opt to purchase a separate policy to cover home and property damage.

In addition to earthquakes, Oregon is the eighth-most wildfire-prone state, with 9% of all property at high or extreme risk from wildfires, according to 2021 estimates by the Insurance Information Institute. Homeowners can find information about what to do in case of a wildfire and how to guard against losses on Oregon’s government website.

If you’re an Oregon homeowner who can’t obtain insurance on the voluntary market (regular insurance channels), you can find basic coverage through the Oregon FAIR Plan Association (OFPA).

A financial advisor in Oregon can help you understand how homeownership fits into your overall financial goals. Financial advisors can also help with investing and financial planning - including retirement, taxes, insurance and more - to make sure you are preparing for the future.

Costs to Expect When Buying a Home in Oregon

However, before you make it to monthly payments of any sort, you’ll have to contend with a number of one-time costs associated with the home-buying process. One of the most important, which comes prior to finalizing a contract, is a home inspection. While not 100% mandatory, it’s the smartest choice on the part of the homebuyer to get a good idea of what they’re potentially spending hundreds of thousands of dollars on.

Home inspections in Oregon average $249 to $500, the lower end of the scale for smaller dwellings, the higher end for larger square footage. General home inspections usually cover the structure, pipes, electrical, roof, basement and a number of other items. If you want specific tests, such as water samples, well flow test, dry rot or pest, expect to pay extra per additional test. In Oregon, inspectors have to be licensed in accordance with state education and testing requirements.

The next step after a satisfactory home inspection, is usually finalizing the purchase contract and proceeding with your mortgage lender. Your lender will set a closing date with you. On that day, you’ll meet with a closing agent and usually your realtor and or attorney to sign a number of documents. You also pay a number of fees associated with home buying called closing costs. Oregon averages 1.26% of the purchase price for closing costs.

Our Closing Costs Study assumed a 30-year fixed-rate mortgage with a 20% down payment on each county’s median home value. We considered all applicable closing costs, including the mortgage tax, transfer tax and both fixed and variable fees. Once we calculated the typical closing costs in each county we divided that figure by the county’s median home value to find the closing costs as a percentage of home value figure. Sources include the U.S. Census Bureau, Bankrate and government websites.

Within the umbrella term, “closing costs,” are a number of fees that go to separate entities. One of the biggest collectors of closing costs is your lender. These are called origination fees and include items and services such as underwriting, origin points, loan processing, commitment fees, document preparation, tax service and more. This is why you might see different mortgage closing cost quotes if you shop around for lenders; most of these fees depend on what the bank charges and differ across the board.

The rest of your money will go to third parties including the county and state you buy the home in, appraisal fees, credit reports and flood certification, survey, appraisal and attorney if you used one. This again, depends on whose services you use during the home-buying process.

Another cost is title insurance, generally required by your lender to protect against any title disputes or issues not caught during the title search and report. It’s a one-time cost that’s supposed to cover you through the life of the loan. You also have the option to purchase an owner’s policy if you’d like to be covered for the full home value, not just the loan amount.

In Oregon, only Washington County allows a real estate transfer tax. While this is usually paid for by the seller, it’s still a benefit to homebuyers who may eventually sell their home.

Details of Oregon Housing Market

Oregon, home of the majestic Mount Hood, is the 27th-most populous state with more than 4.24 million residents, according to estimates by the U.S. Census Bureau. This population is growing too, with Oregon clocking in at a 0.1% growth rate from 2020 to 2022.

The Beaver State, with its nickname matching the state flag, has 95,988 square miles of land area and 1,410 shoreline miles. You can divide the state into seven distinct regions: Central, Eastern and Southern Oregon, Greater Portland, Mount Hood/The Gorge, Oregon Coast and Willamette Valley, according to Oregon’s Tourism Commission.

The largest cities in the state include Portland, Eugene, Salem, Gresham, Hillsboro and Beaverton. Gresham, Hillsboro and Beaverton surround Portland, while Salem and Eugene can be found south of the city. In general, most of Oregon’s population resides in the western part of the state.

In our Healthiest Housing Markets study, Oregon ranked towards the bottom-middle of the pack. This low ranking is mainly due to a low score for affordability and stability. The other two factors we looked at were risk and ease of sale, which this state ranked well for.  According to recent Census data, the state’s median home value is $422,700.

If you’re hoping to buy a home in one of Oregon’s metropolises, you’ll need a deep pocket. Portland’s median home value is $462,800, according to recent Census data. Salem, the state capital, is more affordable at a $289,500 median home value. Eugene is a bit more expensive than Salem, with a $337,200 median home value.

Local Economic Factors in Oregon

Oregon, home of Nike, has seen steady GDP growth over the past several years, ranging from 3% to nearly 10%. Oregon's economic growth is mainly due to durable goods manufacturing, rather than information, which is what drove national GDP growth. However, after the dot com bubble burst in 2011, Oregon dropped from the second-fastest to the sixth-slowest. In 2011, it actually was the slowest.

The Beaver State had several Fortune 500 companies on the 2022 list, including Nike and Lithia Motors. In recent years the state’s largest employers, according to Oregon Live, have included Providence Health System, Intel, Fred Meyer, Oregon Health & Science University and Walmart. Oregon’s December 2022 unemployment rate was 4.5% compared to the national rate of 3.5%, based on data from the U.S. Bureau of Labor Statistics.

As for income, Oregon’s per capita personal income in 2022 was $57,005 according to the U.S. Bureau of Economic Analysis. That placed Oregon just below the national average of $59,765.

Although property taxes are some of the lowest in the country, the same can’t be said for Oregon’s income taxes. Your income will be taxed at the rate that corresponds with the tax bracket you’re in. The low end of the scale is 4.75% and the high end is 9.90% for those making more than $125,000. There are state tax credits available to help lower your tax bill. These include credits for child and dependent care, political contributions, energy credits, retirement income and more.

The good news is that Oregon has no sales tax. Not one single county in the state allows it so you’ll find savings in that arena. The state does charge an estate tax, however, but only on estates with a gross value of at least $1 million.

If you want to get into the weeds with details, try comparing your cost of living. For comparison, a single-income person moving from Cambridge, Massachusetts to Portland, Oregon earning $80,000 a year would see a 10% decrease in cost of living on average, due to cheaper housing and food. Someone moving from Miami, Florida to Portland would see 2% higher average costs due mostly to the tax difference. The same person moving from Minneapolis, Minnesota to Bend, Oregon wouldn't see much change in cost of living, but a move from Brooklyn, New York instead, would yield a 21% lower cost of living, on average.

Mortgage Legal Issues in Oregon

As a homebuyer, you’ll be glad to hear that Oregon has some buyer protections. The first is the most common: seller’s disclosures. Unlike some states, such as Massachusetts that doesn’t require disclosures by law, Oregon requires sellers to fill out and deliver a disclosure to each buyer who makes a written offer to purchase the property. The disclosure includes questions such as, “Are there any encroachments, boundary agreements, boundary disputes or recent boundary changes? Is the property connected to a public or community sewage system? Are there problems with settling, soil, standing water or drainage on the property or in the immediate area?” Disclosures are no substitute for home inspections, but they can help you get an idea of the property’s condition prior to purchase.

Further buyer protections, such as the requirement for sellers to have a smoke alarm installed, and to disclose any material concerns, can be found on the Oregon Realtors Association website.

As for Oregon’s foreclosure laws, the state uses both judicial (judge and lawsuit involved) and non-judicial (no court involvement) processes. If your deed of trust (mortgage document) includes a power of sale clause, your lender can foreclose using the non-judicial process. For this to happen, you have to be behind on your monthly mortgage payments. In some cases, your lender has to request a face-to-face meeting called a resolution conference. If nothing is resolved and you haven’t caught up on your payments, you’ll receive a Notice of Default and then a Notice of Trustee’s Sale, at least 120 days before the sale. In a judicial foreclosure, you’ll receive a Notice of Hearing to appear in court.

Oregon has a Foreclosure Avoidance Program and resources under the Division of Finance and Corporate Securities.

Oregon Mortgage Resources

Homebuyers in the Beaver State can turn to the Oregon Housing and Community Services (OHCS) to find first-time homebuyer programs as well as down payment assistance information. The state has a residential loan program that provides tax-exempt revenue bonds to finance below market rate mortgage loans for qualified first-time homebuyers. Educational programs are available as well ranging from in-person classroom classes to online classes.

Low-to-moderate-income homebuyers in rural areas can benefit from USDA loans and programs. While you’ll have to meet income and credit eligibility criteria, the good news is that almost all of Oregon land is eligible for USDA programs except select areas near Portland, Salem and other cities.

Ready to get serious about planning? Start with taking a look at Oregon’s current mortgage rates. Crunching numbers can give you a better idea of what kind of mortgage payment you’ll be looking at if you decide to buy. While you’re at it, see how much your paycheck will change in Oregon if you’re moving from another state.