How much of a down payment do I need to buy a home in Oregon?

In Oregon, you can buy a home with as little as no money down, by either utilizing the state's first-time home buyer down payment assistance program, or taking advantage of a USDA or VA loan. If you don't qualify for these programs, a conventional mortgage will allow you to bring just 3% to closing in the form of a down payment, or FHA borrowers can put 3.5% down.

How much are closing costs in Oregon?

You can expect to pay about $4,327 in closing costs for a home purchase in the state of Oregon. If you want to refinancing your existing loan, you'll only pay $3,271.

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Oregon has been a popular real estate market for years, as the nice climate and beautiful scenery ranging from beaches to mountains and everything in between has pushed home prices well above the national average. However, there are many markets in Oregon where home prices are relatively affordable, and there are programs designed to help people become homeowners within the state.

With that in mind, here's a quick overview of the current state of the Oregon housing market, some of the most important things to keep in mind as you start your home search, and some tips that pertain to first-time buyers in particular. Use our Oregon mortgage calculator to help you determine your budget and estimate your monthly payment.

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Oregon has been a popular real estate market for years, as the nice climate and beautiful scenery ranging from beaches to mountains and everything in between has pushed home prices well above the national average. However, there are many markets in Oregon where home prices are relatively affordable, and there are programs designed to help people become homeowners within the state.

With that in mind, here's a quick overview of the current state of the Oregon housing market, some of the most important things to keep in mind as you start your home search, and some tips that pertain to first-time buyers in particular. Use our Oregon mortgage calculator to help you determine your budget and estimate your monthly payment.

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Oregon housing market
How do I calculate my mortgage payment?
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Oregon housing market

Home prices have risen rapidly throughout the United States, with the average home value rising by 29% between second quarter 2020 and second quarter 2023, according to research by The Motley Fool. Oregon homes have risen roughly in-line with the rest of the U.S., with sales of single family homes seeing an almost 27% increase in median sales prices between July 2020 and July 2023. However, the last year has seen prices start to come down ever so slightly, by about 3.3% on average state-wide.

Generally speaking, Oregon's housing market is pricier than the national average. The average home sales price in U.S. second quarter 2023 was $416,100, while the median sales price in July 2023 within Oregon was $524,600.

That said, Oregon is a relatively large state, and there is a big difference in both home values and market momentum in the various markets around the state. So, here's a quick breakdown of some of the major markets and where they stand.

Metropolitan Area	Median Home Value	1-Year Change
Portland	$538,106	- 6.2%
Eugene	$475,425	- 1.0%
Salem	$423,122	- 0.5%
Bend	$723,495	- 7.3%
Newport	$488,426	- 1.0%
Medford	$401,355	- 4.8%

Data source: Zillow. Figures as of Sept. 11, 2023.

How do I calculate my mortgage payment?

First off, you don't need to know how to calculate your mortgage payment manually (unless you're reading this for a mathematics course of some kind). We have an excellent Oregon mortgage calculator in this article that can do the hard work for you.

Having said that, you can calculate your mortgage payment by hand, so we'll go through how it works. Before we get to the formula, here are the three variables you'll need to know.

Principal (P)

In lending, principal refers to the original amount you borrowed, not the current loan balance or the selling price of the house. If you took out a mortgage loan for $400,000, that's what you should use. Additionally, if you rolled any of your origination fees or closing costs into your loan (most common with FHA loans), don't forget to include them as well.

Interest rate (r)

For the purposes of calculating your mortgage payment, you'll need to use your loan's interest rate on a monthly basis. This is because you're calculating how much you'll need to pay each month toward your mortgage. To find this, start with your loan's nominal interest rate (not the APR), expressed as a decimal -- so 5% would be 0.05. Then divide it by 12 to find the number you'll use in the formula.

Be sure to check with the best mortgage lenders to find the best rate for your mortgage.

Learn more: What Is a Fixed Rate Mortgage?

Number of months (n)

To determine the number of months in your mortgage term, simply take the number of years and multiply by 12. For 15- and 30-year mortgage loans, you'll use 180 and 360, respectively.

The mortgage calculation formula

Without further delay, here's the formula you'll use along with these three variables to calculate your mortgage payment.

It's worth noting that the payment calculated by this formula is only the principal and interest you'll have to pay each month. Virtually all residential mortgage lenders require borrowers to pay a prorated amount of their annual property taxes and insurance along with their monthly payments, so if you're calculating it by hand, don't forget to add one-twelfth of each of those expenses. And if your home has an HOA fee attached to it, be sure to include it in your monthly housing expenses as well.

Learn more: How Do Down Payments Work?

Things to know before buying a house in Oregon

Before entering a purchase contract on a home in Oregon, there are a few things to keep in mind. Not all of these are Oregon-specific, but all are worth knowing, especially if you've never been through the home-buying process before.

Oregon property taxes

Oregon's property taxes on real estate are right in the middle of the pack, ranking 26 out of 50, according to Tax-Rates.org. The average Oregon homeowner pays 0.87% of their property's assessed fair market value in taxes annually, so on a $500,000 home, this translates to a property tax bill of $4,350. Of course, property taxes can vary quite a bit within a state, but generally speaking, Oregon isn't a high- or low-tax state.

Oregon homeowners insurance

Here's a bit of good news. According to Insurance.com, Oregon is one of the cheapest states in the nation when it comes to insuring a home. The average homeowner's insurance premium for $500k in dwelling coverage with a $1,000 deductible is $3,072, which is 150% lower than the national average. This can vary significantly depending on the condition and features of the property, but homeowner's insurance rates in Oregon tend to be significantly lower than you'll find elsewhere.

Credit score requirements

Before you can qualify for a mortgage, you'll need to show you have a stable employment history, as well as enough income to justify the loan. And you'll also need to meet the lender's credit scoring standards for the type of mortgage you're applying for. This is typically a 580 for a low-down-payment FHA loan, or a 620 for a conventional loan, but the requirements can vary by lender.

Rental restrictions

In many areas, there are restrictions that govern the rental of homes, especially on a short-term basis. If you're shopping for an investment property, second home, or simply want the ability to list your home on Airbnb or a similar platform when you're not there, be sure to look into local rental laws before you buy.

Learn more: Home buyer checklist

Tips for first-time home buyers in Oregon

Like many other states, Oregon offers a program designed to help first-time home buyers afford homes, the Oregon Bond Residential Loan Program. To qualify, you need to be a first-time buyer, use a participating lender, complete a home buyer education course, and have an income below the maximums set for the loan program.

Borrowers can receive up to 100% of their down payment, closing costs, prepaids, upfront mortgage insurance premium, and other loan fees from the Flex Lending program in the form of a second mortgage, which may be forgivable if you qualify.

Check out the Oregon Housing and Community Services (OHCS) website for the most current information on these loan programs.

Still have questions?

Here are some other questions we've answered:

FAQs

In Oregon, you can buy a home with as little as no money down, by either utilizing the state's first-time home buyer down payment assistance program, or taking advantage of a USDA or VA loan. If you don't qualify for these programs, a conventional mortgage will allow you to bring just 3% to closing in the form of a down payment, or FHA borrowers can put 3.5% down.
You can expect to pay about $4,327 in closing costs for a home purchase in the state of Oregon. If you want to refinancing your existing loan, you'll only pay $3,271.

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