Quick Answer: How much is a £120,000 mortgage per month?
A £120,000 repayment mortgage over 25 years costs approximately £507/month at 3%, £569/month at 4%, or £702/month at 5%. Over 20 years, expect to pay roughly £726/month at 5%. The exact figure depends on your interest rate, term length, and whether you choose a repayment or interest-only mortgage.
How Much Is a £120,000 Mortgage Per Month in the UK?
A £120,000 mortgage over 25 years at a 5% interest rate costs around £702 per month on a capital repayment basis. At 4%, that falls to approximately £632 per month. At 3%, you are looking at roughly £569 per month.
Those figures assume a 25-year term. If you extend to 30 years the monthly cost drops — but you pay significantly more interest in total over the life of the loan. Shorten the term to 15 or 20 years and the monthly payment rises, but you clear the debt faster and pay less overall.
Below you will find exact repayment tables for every common rate and term combination, plus answers to the two questions most people have alongside the monthly cost: what salary you need to qualify, and how much deposit you will need. If you want to understand your specific situation, speak to one of our mortgage brokers — they can confirm what you can borrow and which lenders will offer you the best rate.
£120,000 Mortgage Monthly Repayment Table (Capital Repayment)
The table below shows estimated monthly repayments on a £120,000 capital repayment mortgage across the most common interest rates and term lengths. These are indicative figures — your actual rate will depend on your credit profile, deposit, and lender.
| Interest Rate | 15-Year Term | 20-Year Term | 25-Year Term | 30-Year Term |
|---|---|---|---|---|
| 2% | £772/mo | £607/mo | £509/mo | £444/mo |
| 3% | £828/mo | £665/mo | £569/mo | £506/mo |
| 4% | £888/mo | £727/mo | £632/mo | £573/mo |
| 4.5% | £919/mo | £759/mo | £667/mo | £608/mo |
| 5% | £950/mo | £792/mo | £702/mo | £644/mo |
| 5.5% | £981/mo | £825/mo | £737/mo | £681/mo |
| 6% | £1,013/mo | £860/mo | £773/mo | £719/mo |
£120,000 Interest-Only Mortgage Monthly Repayments
An interest-only mortgage has a far simpler calculation — you pay only the interest each month, so the rate is the only variable that matters. The full £120,000 capital remains outstanding at the end of the term and must be repaid separately.
| Interest Rate | Monthly Payment | Annual Cost | Note |
|---|---|---|---|
| 2% | £200/mo | £2,400/yr | Capital of £120,000 still owed at end |
| 3% | £300/mo | £3,600/yr | Capital of £120,000 still owed at end |
| 4% | £400/mo | £4,800/yr | Capital of £120,000 still owed at end |
| 5% | £500/mo | £6,000/yr | Capital of £120,000 still owed at end |
| 6% | £600/mo | £7,200/yr | Capital of £120,000 still owed at end |
Interest-only mortgages are most commonly used by buy-to-let landlords and some older borrowers with a credible repayment strategy. Most mainstream residential lenders require a solid repayment vehicle — typically an investment portfolio, pension, or proceeds from a property sale — before approving interest-only lending.
What Salary Do I Need for a £120,000 Mortgage?
Most UK lenders use an income multiplier of 4 to 4.5 times your annual salary to calculate the maximum they will lend. To work out the minimum salary required for a £120,000 mortgage:
| Income Multiple | Minimum Solo Salary Needed | Minimum Joint Salary Needed |
|---|---|---|
| 4x salary | £30,000 | £15,000 each (combined £30,000) |
| 4.5x salary | £26,667 | £13,333 each (combined £26,667) |
| 5x salary | £24,000 | £12,000 each (combined £24,000) |
| 5.5x salary | £21,818 | £10,909 each (combined £21,818) |
| 6x salary | £20,000 | £10,000 each (combined £20,000) |
At the standard 4–4.5x multiple, a solo applicant needs a salary of approximately £26,700–£30,000 to qualify for a £120,000 mortgage. On a joint application, that figure is split across both incomes.
A small number of specialist lenders will stretch to 5.5–6 times salary in certain circumstances — typically for first-time buyers, professionals, or borrowers with a strong deposit and clean credit. These products are not available directly and require a broker to access.
Income multiple is one part of the affordability assessment. Lenders also run a full expenditure stress test — factoring in existing debts, childcare costs, and household bills — before confirming what they will lend. A mortgage that passes the income multiplier check may still fail the affordability test if outgoings are high.
How Much Deposit Do I Need for a £120,000 Mortgage?
The deposit you need depends on two things: the purchase price of the property and the minimum deposit percentage your lender requires. A £120,000 mortgage is the loan amount — the deposit is calculated as a percentage of the property value.
Here are the deposit and property value combinations that result in a £120,000 mortgage:
| Property Value | Deposit % | Deposit Amount | Mortgage Required |
|---|---|---|---|
| £126,315 | 5% deposit | £6,315 | £120,000 |
| £133,333 | 10% deposit | £13,333 | £120,000 |
| £150,000 | 20% deposit | £30,000 | £120,000 |
| £160,000 | 25% deposit | £40,000 | £120,000 |
| £200,000 | 40% deposit | £80,000 | £120,000 |
A 5% deposit (95% LTV) is the minimum most lenders will accept, though products at this tier carry higher interest rates and stricter affordability criteria. Increasing your mortgage deposit to 10% or 15% opens up a significantly wider range of products and better rates. At 25% deposit (75% LTV), you access the most competitive rates on the market.
Factors That Affect Your £120,000 Mortgage Repayments
Interest Rate
The single biggest variable in your monthly payment. The mortgage interest rate you are offered depends on the Bank of England base rateThe interest rate set by the Bank of England, affects the in..., your credit score, your deposit size, and whether you choose a fixed or variable product.
A fixed-rate mortgage locks your rate for a set period (typically 2, 3, or 5 years), giving you predictable monthly payments regardless of what happens to the base rate. A tracker mortgage follows the base rate — payments fall when it falls, and rise when it rises.
Mortgage Term
Mortgage terms in the UK typically run from 10 to 35 years. A longer term lowers your monthly payment but increases the total interest paid over the life of the loan. The difference is significant:
- £120,000 at 5% over 15 years: £950/month, total interest paid ≈ £51,000
- £120,000 at 5% over 25 years: £702/month, total interest paid ≈ £90,600
- £120,000 at 5% over 30 years: £644/month, total interest paid ≈ £111,800
Choosing a shorter term costs more each month but saves a substantial amount in total interest. Many borrowers choose a middle-ground term of 20–25 years to balance monthly affordability against total cost.
Repayment vs Interest-Only
A capital repayment mortgage reduces your outstanding balance every month, so you own the property outright at the end of the term. An interest-only mortgage keeps monthly costs low but leaves the full £120,000 outstanding — you will need a credible strategy to repay the capital when the term ends.
Your Credit Score
A stronger credit score puts you in a better negotiating position on rates. Borrowers with an excellent credit history are offered the most competitive products — potentially saving tens of thousands of pounds in interest over a 25-year term. If your credit history is imperfect, specialist bad credit mortgage lenders exist, though their rates are higher.
Your Deposit Size
The loan-to-value (LTV) ratio directly influences the rate you are offered. Moving from a 90% LTV to an 85% LTV (by saving an extra 5% deposit) can unlock a meaningfully lower rate tier — which on a 25-year mortgage can reduce your total repayment by several thousand pounds.
Additional Costs to Factor In
Monthly mortgage repayments are not your only housing cost. When budgeting for a £120,000 mortgage, you should also account for:
- Buildings insurance: Required by all mortgage lenders as a condition of the loan. Typically £100–£300/year for a standard property.
- Life insurance / mortgage protection: Not legally required but strongly recommended — and often expected by lenders. Costs vary significantly by age and health.
- Valuation fee: Paid upfront to the lender to assess the property value. Can range from free (offered by some lenders) to several hundred pounds.
- Broker fees: Many mortgage brokers offer fee-free advice; others charge a fixed fee. A fee-free whole-of-market broker still costs you nothing and gives you access to the full market.
- Solicitor / conveyancing fees: For a purchase, budget £1,000–£2,000 for legal costs. For a remortgageDefinition A remortgage is when you switch your existing mor..., some lenders cover this.
The Role of Income in Getting a £120,000 Mortgage Approved
Beyond the income multiplier, lenders carry out a full affordability assessment to ensure you can comfortably meet the monthly repayments if interest rates were to rise. The stress test typically adds 2–3 percentage points to the rate you have been offered and checks that you could still afford the payments.
- Employed applicants will need to provide three months of payslips and recent bank statementsA record of a borrower's financial transactions often requir.... The lender will use your basic salary and may consider confirmed bonuses, commission, or overtime — though the treatment varies by lender.
- Self-employed applicants typically need two to three years of tax calculations (SA302s) and corresponding tax year overviews to evidence income. Some lenders will consider one year of accounts for self-employed borrowers in the right circumstances.
- Joint applicants can combine incomes, reducing the salary requirement per person and potentially unlocking a lower LTV tier if both applicants contribute to the deposit. On a joint mortgage, both applicants are jointly and severally liable for the full debt.
FAQs — £120,000 Mortgage Monthly Repayments
How much is a £120,000 mortgage per month in the UK?
A £120,000 capital repayment mortgage over 25 years costs approximately £569/month at 3%, £632/month at 4%, or £702/month at 5%. Shortening the term to 20 years increases monthly payments — for example, to around £727/month at 4%. The exact figure depends on the interest rate you are offered and your chosen mortgage term.
What salary do I need for a £120,000 mortgage?
At the standard 4–4.5x income multiple used by most UK lenders, you would need a salary of approximately £26,700–£30,000 as a solo applicant. On a joint application, that figure is based on combined income. Some specialist lenders will consider up to 5.5–6 times salary, reducing the minimum single salary requirement to around £20,000–£22,000.
How much deposit do I need for a £120,000 mortgage?
The minimum deposit most lenders accept is 5% of the property value, not the mortgage amount. If you are buying a property worth £126,315 with a £120,000 mortgage, your deposit is approximately £6,315 (5%). A larger deposit reduces your LTV ratio and gives you access to better interest rates — a 10–15% deposit makes a meaningful difference to the rate you will be offered.
How much would a £120,000 mortgage cost over 20 years?
A £120,000 repayment mortgage over 20 years costs approximately £665/month at 3%, £727/month at 4%, or £792/month at 5%. The shorter term means higher monthly payments than a 25-year mortgage, but you pay considerably less interest in total.
How does a higher deposit affect my monthly repayments?
A larger deposit reduces your loan-to-value ratio, which typically gives you access to lower interest rates. Lower rates mean lower monthly repayments. For example, moving from a 90% LTV to an 80% LTV product on a £120,000 mortgage at 4% vs 4.5% saves around £30 per month — or approximately £9,000 over a 25-year term.
Can I switch from a variable to a fixed-rate mortgage?
Yes. Most lenders allow you to switch products — either at the end of a deal period (with no penalty) or mid-term (potentially with an early repayment chargeA fee charged by lenders if the borrower pays off the mortga...). Fixing your rate gives you payment certainty, which many borrowers prefer when rates are expected to rise. A mortgage broker can confirm whether switching makes financial sense based on your current deal and remaining term.
What happens if my income changes during the mortgage term?
Contact your lender as soon as possible if your income changes significantly. Most lenders offer short-term solutions such as a payment holiday or temporary switch to interest-only. Missing payments without prior agreement harms your credit score and can escalate to mortgage arrears. Acting early gives you the most options.
Can I overpay on a £120,000 mortgage?
Yes — most mortgage products allow overpayments of up to 10% of the outstanding balance per year without incurring an early repayment charge. Overpaying consistently reduces your outstanding balance faster, shortens your effective term, and saves a meaningful amount in total interest. Check your mortgage terms or ask your lender for the exact overpayment allowance on your product.
Are there mortgages for people with bad credit looking to borrow £120,000?
Yes. Specialist lenders offer bad credit mortgages for borrowers with CCJs, defaultsMissed payments on credit accounts, which can affect a borro..., or missed payments in their history. You are likely to need a larger deposit (typically 15–25%) and will pay a higher interest rate — which increases monthly costs above the figures in the table above. A specialist mortgage broker is essential for navigating this part of the market efficiently.
