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Getting a Mortgage for £120,000

What to get a mortgage for £120,000? Click through to check costs, affordability, and see if you qualify for a mortgage of this amount

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: May 3, 2022

Are you looking to take out a £120,000 mortgage but unsure if you can afford the repayments?

Try our calculator below to find out what your monthly payments will look like on a mortgage of this amount.

calculator icon

Mortgage Repayment Calculator

Our mortgage repayment calculator can tell you how much your mortgage will cost you each month and overall. Enter the amount you’re borrowing, the term length and interest rate, and our calculator will do the rest.

Enter the amount you're borrowing
2.5% is an average figure but the rate you get may vary
25 years is average, but most lenders offer longer and shorter terms

Monthly Repayments:

Interest Only:

Total amount paid at end of term:

Get started with an expert broker to find out how much they could help you save on your mortgage repayments.

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Example calculations

The exact repayments you can expect on a mortgage of this amount will vary based on a variety of factors including your credit rating, the length of the mortgage term and other issues relating to your individual circumstances.

The repayments on £120,000 will also be heavily influenced by the interest rate of products you qualify for, whether you opt for a repayment mortgage or interest only, and the length of the mortgage term. However, it is possible to get a rough idea: for an illustration of how these variables can affect the monthly repayments on a £120k mortgage, take a look at the table below:

Interest rate 1% 2% 3% 4% 5%
5 years £2,051 £2,103 £2,156 £2,210 £2,265
10 years £1,051 £1,104 £1,159 £1,215 £1,273
15 years £718 £772 £829 £888 £949
20 years £552 £607 £666 £727 £792
25 years £452 £509 £569 £633 £702
30 years £386 £444 £506 £573 £644
35 years £339 £398 £462 £531 £606
Interest only £100 £200 £300 £400 £500

Does the mortgage term affect repayments?

As you can see, the interest rate and mortgage term are the main factors that determine how much you’ll pay each month: this is simply because spreading the payments on, say, a £120k mortgage over 30 years allows enough time to break down the total debt into many more smaller chunks than if you applied the same rules to a £120k mortgage over 10 years.

The term is largely fixed by your age: most providers can only lend to you if you turn 75 before the end of the term, while a few cap at 80 years of age.  It is possible for younger borrowers to stretch out their mortgage over 35 or even 40 years to reduce monthly cost.

Don’t forget, a longer term also means paying a lot more more interest. Some borrowers prioritise a shorter term with less interest overall but higher repayments, while others prefer to benefit from the lower monthly repayments of a longer term, perhaps while they’re earning below a certain amount.

How to get the best rates on a £120,000 mortgage

So how do you qualify for a lower interest rate? This will depend partly on current market conditions, but also on factors relating to your circumstances, such as how much of a deposit you can put down, your credit history and even the type of property you’re buying.

These factors along with others that can affect the rate are covered in the rest of the article, but generally speaking, borrowers with the lowest theoretical ‘risk’ to lenders (bigger deposit, clean credit record, standard property etc) will get access to the widest selection of mortgage products, and will, therefore, benefit from the lowest rates.

To speak to an advisor with an all-of-market overview and access to the best rates on £120k mortgages, feel free to call us on 0808 189 2301 or make an enquiry here.

How much deposit do I need for a £120k mortgage?

The smallest deposit you could put down on a mortgage for a £120k property would be around £6,000, but as 95% mortgages are scarcer than 85% or 90% products, they are harder to qualify for.

Most lenders will therefore want a deposit of around £12,000 or perhaps even up to  £24,000 or more, depending on your circumstances.

The bigger the deposit, the better the deals you will be able to access, so by paying down as much as you can, you should be able to benefit from more generous interest rates and a wider range of products overall.

Can I get a Buy to Let mortgage for £120,000?

Absolutely: we get plenty of enquiries about £120k Buy to Let mortgages, and will be happy to put you in touch with a suitable advisor who have extensive has experience in Buy to Let. in the field of investment property.

However, Buy to Let (BTL) mortgages differ from residential mortgages in a number of important ways, so it’s worth getting to grips with the key differences first.

For example, most lenders want higher deposits for BTL mortgages, and many fix these products at 75% LTV. A few will stretch to 85% LTV, depending on other factors such as your credit history and income. Some even impose minimum income requirements – typically at about £25k per annum.

There are also stricter criteria about the types of borrower they can accept for BTL, with many excluding first time buyers, and some insisting on at least 12 months as a homeowner with a clean repayment record.

BTL mortgages are usually paid on an interest only basis, so to get an idea of what this looks like on a £120k mortgage.

Can I get a £120,000 interest only mortgage?

Yes, most lenders can certainly offer residential mortgages of £120,000 on an interest only basis, as long as you fit the criteria and can demonstrate that you have a suitable repayment strategy in place.

The eligibility criteria for an interest only mortgages are often a little different than those for repayment mortgages, and you may find you’ll need to put down a bigger deposit. Most lenders will want at least a 25% deposit (75% LTV), while some can consider 80% LTV and a few can stretch to 85% under certain conditions.

Interest only mortgages are attractive to some due to their lower monthly costs, which can be very helpful if cash flow is likely to be an issue. Others prefer the certainty of repayment models, which have higher monthly costs but allow the loan itself to shrink over time.

Monthly repayments on a £120k interest only mortgage

Another frequent question our customers ask is ‘how much is a £120 000 interest only mortgage?’ For a in depth look at the overall costs, take a look at our guide to interest only mortgages. But as long as you know the interest rate, you can work out how much you’ll pay monthly for a mortgage of £120,000 on an interest only basis.

The table below compares monthly payments on a repayment mortgage with an interest only mortgage on £120,000, assuming a 4% interest rate:

Mortgage Term Monthly repayment Interest only
5 years £2,210 £400
10 years £1,215 £400
15 years £887 £400
20 years £727 £400
25 years £633 £400
30 years £573 £400
35 years £531 £400

As per the table, the mortgage term makes no difference to the interest only monthly payment, as repayment of the loan takes place with one transaction at the end of the term, rather than gradually, over time.

If you’re interested in taking out an interest only mortgage for £120,000 and would like to discuss this with an advisor in the context of your individual circumstances, feel free to call us on 0808 189 2301 or make an enquiry here.

What else could affect my application for a £120,000 mortgage?

What else could affect your application for a £120000 mortgage?

Here are a few of the other factors that lenders will consider in addition to your credit rating:

  • How you receive your income:
    Lenders tend to favour those on a regular PAYE salary, so provided you are past your probation period (though some lenders will accept a mortgage with a probationary period), you’ll get access to the most favourable rates if you’re employed on these terms. But there is a growing market catering for self-employed borrowers and some lenders specialise in this field, so as long as you can demonstrate sufficient regular income, you should be able to find a suitable deal.
  • Your age:
    Most lenders have an upper age limit and will not consider lending to you on a standard mortgage if you’re over 75, while others fix this cap at 80 or 85 years. A few do not impose an age limit if you can demonstrate a robust strategy for meeting repayments after you retire.
  • The type of property you’re buying
    Properties with non standard features or that are constructed from certain less common materials are often seen as ‘high risk’ by lenders and some will not agree to mortgages for buildings in these categories – exactly what constitutes a ‘non standard’ property varies from one lender to the next but they include steel framed houses, ultra high rise flats, prefabs and even listed buildings.
  • If you’re buying a second property
    Most lenders apply different rules to applicants seeking to take out a second mortgage whether it’s a buy to let or a second home, so if this is your situation you can expect to be offered lower LTVs, higher rates and a bit more scrutiny around affordability in general.

Secured loans of £120,000

If you already own property and are looking to raise a lump sum of £120,000, secured loans or second charge mortgages are one way to access such funds without remortgaging or releasing equity.

Second charges are essentially a second mortgage on a single property, with the property as security. Provided you meet lenders’ criteria they can usually be arranged fairly quickly and with much more favourable rates than unsecured loans, but in theory they are riskier for the borrower than they are for the lender.

Speak to a whole of market £120,000 mortgage advisor today!

If you still have questions about whether you can afford a £120k mortgage or are now ready to take the next step to applying, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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