Why Your Central Oregon Mortgage Payment Is Going Up — Even If Your Rate Didn't Change

By John Payson | The Payson Group | Central Oregon Real Estate

A few weeks ago, I opened our escrow statement and did a double-take.

Our mortgage rate hadn't changed. We're on a fixed loan — same payment we've made for years. But our escrow was going up by $1,778 this year. Not our interest. Not our principal. Our taxes and insurance.

After nearly two decades in real estate — licensed since May 2007 in Oregon and Washington — I've seen many market shifts. But I've never seen escrow adjustments like this. And when I started digging into why, the numbers told a story that every homeowner — and every prospective buyer — in this region needs to understand.

What's Actually Driving the Increase

There are two primary culprits, and neither of them has anything to do with your lender.

Property Taxes

Oregon law limits assessed value increases to 3% per year — a protection voters passed decades ago. But that cap doesn't cover voter-approved bonds and levies, and those have been stacking up in Deschutes County.

In 2024-25, Bend homeowners saw property tax increases of approximately 8% — well above the 3% baseline — driven by fire district levies, school bonds, and other voter-approved measures compounding on top of each other. The Deschutes County Assessor confirmed this publicly when statements went out last fall.

This isn't unique to Bend. It's a pattern playing out across Oregon, where the General Fund and Lottery budget grew 17.2% from the 2021-23 to the 2023-25 biennium alone — far outpacing inflation and population growth.

Homeowners Insurance

This one hits Central Oregon especially hard.

Oregon homeowners' insurance premiums have risen approximately 30% since 2020, according to the Oregon Department of Consumer and Business Services. The primary driver is wildfire risk — Oregon experienced its worst recorded fire season in 2024, with insured losses statewide exceeding $350 million.

In January 2025, Oregon released its statewide wildfire hazard maps, designating roughly 106,000 tax lots as high-hazard. While state law prohibits insurers from using those maps directly to set rates, the correlation between their release and premium increases across Central Oregon has been impossible to ignore. Some Deschutes County homeowners have seen their policies jump dramatically — or been dropped entirely.

The result: a shrinking insurance market, fewer competitive options, and higher costs for everyone — including homeowners nowhere near a forest.

The Bigger Picture for Central Oregon

These aren't isolated frustrations. They're symptoms of a broader affordability crisis that's reshaping our region.

According to a 2025 City of Bend report, only 16% of Bend households can currently afford to purchase a home at market rates. Nearly half of all renters in Bend are cost-burdened — spending more than 30% of their income on housing. The median home list price in Bend reached $899,000 in April 2025, a 14.5% increase from the prior year.

Oregon ranks 40th in affordability nationally according to U.S. News and World Report. Statewide, 73% of Oregonians reported cutting back on spending due to rising housing and food costs in 2025. Household debt has hit record levels, and bankruptcy filings rose 25% between 2024 and 2025.

Bend has grown from a town of 20,000 in the 1990s to over 100,000 today. The infrastructure, services, and policy environment haven't kept pace — and the cost of that gap is landing directly on homeowners.

What This Means If You're Buying or Selling

If you're a buyer, this is a critical piece of your affordability calculation. Your mortgage pre-approval tells you what you can borrow — but your actual monthly payment includes taxes and insurance that are now moving targets. In Central Oregon, those costs deserve serious attention before you choose a property or a neighborhood.

If you're a seller, understanding this dynamic matters too. Buyers are increasingly sophisticated about the total cost of ownership, and properties in high-insurance-risk zones or high-levy districts are being scrutinized more carefully than ever.

If you're a current homeowner watching your escrow climb, you're not alone — and you're not imagining it. These increases are real, they're documented, and they're directly connected to policy decisions being made at the county and state level.

The Bottom Line

A fixed-rate mortgage used to mean predictable housing costs. In Oregon today, that's no longer a safe assumption. Property taxes and insurance — both heavily influenced by policy choices — have become the volatile variables in an equation that's squeezing Central Oregon families from every direction.

Understanding why this is happening is the first step to making informed decisions about your housing situation — whether you're buying, selling, or staying put.

John and Sarah Payson have been serving buyers and sellers since May 2007, licensed in both Oregon and Washington. The Payson Group is powered by Jason Mitchell Group and based in Central Oregon.

If you're wondering how these cost increases affect your buying, selling, or current ownership position in Central Oregon, we're happy to talk through it. No pressure — just a conversation.

📞 541-706-0009 📧 john@thepaysongroup.com 🌐 ThePaysongGroup.com

Sources: Deschutes County Assessor, Oregon Department of Consumer and Business Services, City of Bend Housing Report (October 2025), Oregon Legislative Fiscal Office, U.S. News and World Report Affordability Rankings, Bureau of Labor Statistics, KTVZ News.