Repayments On A £120,000 Mortgage

To help you budget for the future, find out how much a £120,000 Mortgage is per month by using our monthly repayments calculator. Or, you can read more about this topic below.

Enter the amount you're borrowing
Enter the mortgage rate, 5.5% is a typical rate currently but this can vary
Enter the mortgage term, 25 years is the average but lenders can offer shorter and longer terms

The monthly repayments on a £ mortgage would be

The total amount paid at the end of your mortgage term would be .

Importantly, the principal amount of £ remains outstanding and must be repaid at the end of the term.

You would need an annual household income of around to afford this mortgage. This is based on 4.5 times your income, the standard calculation used by the majority of mortgage providers.

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Home Mortgage Repayments Repayments On A £120,000 Mortgage

Author: Pete Mugleston

Mortgage Advisor, MD

Reviewer: Jon Nixon

Director of Distribution

Updated: April 2, 2024

How we reviewed this article:

Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.

April 2, 2024

Repayments on a £120,000 mortgage will vary depending on your mortgage type. Your mortgage repayments will be determined by the length of your term, interest rate, and the type of mortgage you get.

A longer term will mean smaller monthly repayments but will result in you paying more in the long term. The higher the interest rate, the more you’ll pay and if you get an interest-only mortgage, for example, you’ll only cover the interest charges, not the principal amount borrowed.

In this article, we’ll look at the monthly repayments you can expect for a £120,000 mortgage, the annual income, and the deposit amount you’ll need to apply for this mortgage. As well as how using a mortgage broker can help you obtain the lending you need at the most competitive interest rates.

How much will your £120,000 mortgage cost per month?

At the time of writing (April 2024) the average monthly repayments on a £120,000 mortgage are £702. This is based on current interest rates being around 5%, a typical mortgage term of 25 years, and opting for a capital repayment mortgage. Based on this, you would repay £210,452 by the end of your mortgage term.

Bear in mind, if you secure a mortgage with a longer term, 30 years for example, the total amount you pay back will be higher but your monthly repayments will be smaller.

Speak to one of the advisors we work with for a representative idea of what you might repay. They can help you secure favourable terms and lower repayments than you might get if you try to secure a mortgage by yourself.

How much do you need to earn to get a £120,000 mortgage?

The amount you can borrow is based on your salary. Almost all lenders will loan around 4 or 4.5 times your annual income. You’d need an annual income of at least £30,000 to be approved for a £120,000 mortgage. This is below the average UK annual salary, currently £34,900 (April 2024).

You might want to consider getting a joint mortgage with someone if you earn less than the average salary or the figures listed above. By doing so, your combined earnings can be used for this calculation.

Some lenders may also be willing to offer 5 times or even 6 times your annual salary, but this will depend on your circumstances and whether you meet their often stricter eligibility criteria. For example, most lenders will only borrow 6 times the annual salary to certain professions deemed low risk, such as teachers and nurses.

The chart below helps to illustrate the various income multiples that might be available to you depending on your annual salary.

In these circumstances, it’s best to consult with a broker who can indicate which lenders can offer this and whether you’d likely qualify.

Income 4x income 4.5x income 5x inxome 5.5x income 6x income
£30,000 £120,000 £135,000 £150,000 £165,000 £180,000
£32,000 £128,000 £144,000 £160,000 £176,000 £192,000
£34,000 £136,000 £153,000 £170,000 £187,000 £204,000
£36,000 £144,000 £162,000 £180,000 £198,000 £216,000
£38,000 £152,000 £171,000 £190,000 £209,000 £228,000
£40,000 £160,000 £180,000 £200,000 £220,000 £240,000
£42,000 £168,000 £189,000 £210,000 £231,000 £252,000

Bear in mind that if you’re applying for a joint mortgage with one or more other applicants, lenders will usually look at your combined earnings. Limited options are available, usually through a broker, for people who need to borrow up to x6 salary.

The above table is for comparative purposes only. Talk to your mortgage lender or broker for the most up-to-date information on affordability criteria.

If you’d like to test this for yourself, based on your annual income, take a look at our mortgage affordability calculator below:

Mortgage Affordability Calculator

Use this calculator to determine how much you could potentially borrow for a mortgage, based on the typical salary multiples used by most UK lenders.

Input full salaries for all applicants

Your Results:

You could borrow up to 

Most lenders would consider letting you borrow

This is based on 4.5 times your household income, the standard calculation used by the majority of mortgage providers. To borrow more than this, you will need to use a mortgage broker to access specialist lenders.

Some lenders would consider letting you borrow

This is based on 5 times your household income, a salary multiple you might struggle to qualify for without the help of a broker. This income multiple is not widely available to customers who are applying directly with a lender.

A minority of lenders would consider letting you borrow

This is based on 6 times your household income, a salary multiple you will struggle to get without a broker. Six-times salary mortgages are usually only available under very specific circumstances.

Get Started with an expert broker to find out exactly how much you could borrow.

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How much deposit do you need for a £120,000 mortgage?

Currently, residential mortgage lenders impose minimum deposit requirements ranging from 5% to 10%. This percentage is based on the property value, not the mortgage amount.

For instance, if you were purchasing a property valued at £120,000 (rather than borrowing this exact amount), your minimum deposit would fall within the range of £6,000 to £12,000. Consequently, your mortgage amount would be between £108,000 and £114,000.

While it’s rare, it’s not entirely impossible to secure a mortgage for £120,000 with no deposit at all.

However, if you encounter bad credit issues or are interested in a mortgage for a non-standard construction property, you might need a higher deposit—around 25%. Keep in mind that these factors will limit your choice of lenders.

For buy-to-let mortgages, most lenders typically require a minimum deposit of 20%. However, an experienced mortgage broker in this field may be able to identify lenders who ask for less.

Remember: The larger your deposit, the more likely you are to qualify for competitive interest rates. Lenders often reserve their best rates for mortgages with the lowest loan-to-value ratios.

You can see how this works on our calculator below.

LTV Calculator

This calculator will tell you what your loan-to-value (LTV) ratio is, based on the property's value, your deposit/equity and the amount you're borrowing.

Enter an amount in pound sterling
Property value minus your deposit/equity
Loan amount must be less than property value

Your Results:

Your LTV is

This means that most mortgage providers will consider your deposit amount to be more than satisfactory, but speaking to a broker is still recommended to ensure you get the best deal.

This means you’re likely to meet the deposit requirements at most lenders, but since many reserve their best rates for those with higher deposits, speaking to a broker is recommended.

Many mainstream mortgage providers would consider this high and be reluctant to lend. Applying through a mortgage broker may be necessary to find a specialist low deposit mortgage lender.

LTVs have a direct impact on the rates available to you - speak to a mortgage broker and find out how to get the best deal based on your ratio.

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How to get a £120,000 mortgage

Once you’ve found a property and made some calculations, the next step in your mortgage application should be to speak to a mortgage broker to ensure you get the best rate and deal on your mortgage. Make an enquiry with us and we will match you with the right advisor for free.

They’ll be able to help with:

  • Deposit requirements: You’ll need to save a minimum deposit of 5% to 10% for a £120,000 mortgage. How much this figure will be depends on the value of the property, but a 10% deposit on a £100,000 house would be £10,000. A simple way to help you save money is to set up a savings account and put a percentage of your monthly wage, around 10 to 15%, into the account each month.
  • Downloading and optimising your credit reports. Before you apply it’s important to check your credit history to make sure no bad credit issues exist and remove any inaccurate or outdated information that could hinder your chances of securing the mortgage you need.
  • Gathering all the necessary paperwork required for your application: Your broker will be able to guide you through the application process and all the typical documents required – proof of income, at least three months of bank statements, personal ID, proof of address, evidence of deposit, latest P60 form etc.
  • Calculating how much you can borrow. Using the most up-to-date salary multiple calculations, a mortgage broker will be able to work out whether you can borrow the amount you need, based on your income.
  • Finding the right lender offering the best rates. Your broker can save you a lot of time and, potentially, some money too by identifying the mortgage lenders currently offering the most competitive interest rates available across the market.
  • Guiding you through the process: Getting a mortgage can be difficult, especially if it’s your first application. The right mortgage broker can help you with any issues you may face along the way, look after your interests and be a lifeline in case anything goes wrong.

Example monthly repayments for a £120,000 mortgage

Below are some examples to give you an idea of what your payments could be for a mortgage this size, and to illustrate how different factors – namely the interest rate and term – can change the monthly cost.

For interest-only mortgages, the repayment remains as is regardless of the term. So, for example, the repayment shown for 6% – £600 per month – would be the same if you opted for a 15-year term or a 30-year term as the capital owed doesn’t reduce and is paid off in full at the end using a separate repayment vehicle.

Interest rate 15 years 20 years 25 years 30 years 35 years Interest-only
1% £718 £552 £452 £386 £339 £100
2% £772 £607 £509 £444 £398 £200
3% £829 £666 £569 £506 £462 £300
4% £888 £727 £633 £573 £531 £400
5% £949 £792 £702 £644 £606 £500
6% £1,013 £860 £773 £719 £684 £600
7% £1,079 £930 £848 £798 £767 £700
8% £1,147 £1,004 £926 £881 £852 £800

For the purpose of this table, we assume the interest rate stays the same for the full length of the mortgage. Interest rates can change if you decide to remortgage on to a different rate or move from a fixed or discounted deal on to the lender’s standard variable rate (SVR).

With the Bank of England base rate currently at 5.25% (April 2024) and the average mortgage rates between 5%-6%, the repayment figures for these rows in the table would be the most realistic at present. However, as the base rate comes back down in the future, mortgage lenders should follow suit and reduce their rates too.

Factors that can affect monthly repayments

Here are some of the key criteria that could have an impact – both directly and indirectly – on your mortgage repayments:

Interest rates

The rate you secure will influence the monthly cost. Everything else being the same, a higher interest rate will mean you pay more for a £120k mortgage monthly. The rates available on the market can vary. So, it’s crucial to deal with a lender who’ll offer the most competitive rate for your circumstances.

Fixed or Tracker

You’ll also have the option to choose between a fixed rate vs a tracker mortgage. Usually, a fixed rate will be higher, increasing your monthly repayment. But, locking in a rate can allow you to better plan your finances.

Term Length

How long you take out a mortgage for can affect your rates and directly impact your monthly cost for a £120k loan. A longer term will likely reduce your monthly repayments, but it usually means paying more over the life of the mortgage.

Your age

Although it’s possible to get a mortgage at almost any age, time on your side can lead to better deals from lenders. This could mean lower rates and monthly repayments for your £120,000 mortgage.

The role your credit score plays

It’s worth downloading all your credit reports before applying for a mortgage because these scores can make a difference to the number of lenders willing to consider your application and, therefore, indirectly affect the rates you’ll be offered. Your broker can help with any mistakes and show you areas to improve. If you do have bad credit, there will still be specialist lenders available.

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Other mortgage costs to consider

There are a few other additional charges to think about that may impact the monthly costs when setting up a mortgage worth £120,000:

Product fees

Some mortgages come with fees to set them up. These fees can include a booking fee, an arrangement fee, and a valuation fee. If you choose to include these mortgage fees in your total loan, it means you won’t have to pay anything upfront. However, keep in mind that including them will increase the amount you pay each month.


When considering a mortgage, you’ll likely need to account for additional insurance costs. These may include:

  • Home insurance: Covers your property against damage or loss.
  • Life insurance: Provides coverage for the mortgage in case of your death.
  • Income protection: Helps if you’re unable to work due to illness or injury.
  • Critical illness cover: Assists if you’re diagnosed with a serious medical condition

Stamp duty

Depending on the home’s value and whether it’s your main residence, you might be required to pay stamp duty. First-time buyers or those purchasing residential properties under £250,000 are exempt from this tax.

Legal fees

These costs typically arise during the purchase process. While they don’t directly impact monthly payments, they are an additional expense to consider in your calculations.

Why use Online Mortgage Advisor?

We offer a free broker matching service that pairs you with the mortgage broker in our network who has the most experience in achieving the goal you’re aiming for, whether this is minimising the monthly repayments, maximising your borrowing or you have complex personal circumstances.

All of the brokers that we work with offer a free initial consultation, and work on a success-only payment structure, meaning they will only charge a fee if they’re able to secure you a mortgage. Simply call us today on 0808 189 2301 or make an enquiry, and let us find the right broker to help you.

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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 Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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