Can I Afford a Home with Today’s Rates?

As mortgage rates remain elevated compared to recent years, many buyers in Central Oregon are wondering whether homeownership is within reach. While rates can impact your monthly payments, affordability is about more than just the interest rate. Here's how to evaluate your readiness:

✅ 1. Know Your Monthly Budget

Use the 28/36 rule as a baseline:

• No more than 28% of your gross monthly income should go to your mortgage payment (including taxes and insurance).

• No more than 36% should go to all debt combined (including credit cards, car loans, and your mortgage).

📌 Example: If your household earns $7,000/month, aim for a mortgage payment around $1,960 or less.

✅ 2. Get Pre-Approved

Before falling in love with a home, meet with a lender who can:

• Review your income, debts, and credit

• Give you a realistic idea of your price range

• Lock in a rate if you're ready to move forward

A pre-approval letter also gives you a competitive edge in today's market.

✅ 3. Factor in All Ownership Costs

Beyond the mortgage, plan for:

• Property taxes (higher in some areas like Bend vs. La Pine)

• Homeowners insurance

• HOA fees (if applicable)

• Maintenance and repairs

• Utilities, especially in larger homes or rural properties

✅ 4. Consider a Rate Buydown or ARM

Many Central Oregon buyers are using tools like:

• Rate buydowns (temporary or permanent) paid by seller or builder

• Adjustable Rate Mortgages (ARMs) to start with a lower initial rate

Ask your lender what’s right for your timeline and risk tolerance.

✅ 5. Compare Rent vs. Own

In 2025, rents across Central Oregon have also risen. In some cases, owning may cost the same or less per month — and you're building equity.

FAQs

Q: What’s a good credit score to buy in 2025?

A: A score of 620+ typically qualifies, but 740+ gets you the best rates.

Q: Can I buy with student loan debt?

A: Yes — lenders look at your debt-to-income ratio, not just loan balances.

Q: Are there programs to help?

A: Yes! Look into Oregon Bond Loans, RootedHomes, Habitat, or first-time buyer grants.