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 repayment tables for common rates and term lengths, what salary you need to qualify, and how much deposit is required. If you want to understand your specific situation, speak to our mortgage team to confirm what you can borrow and compare lender rates.
£120,000 Mortgage Monthly Repayment Table (Capital Repayment)
The table below shows estimated monthly repayments on a £120,000 capital repayment mortgage across common interest rates and term lengths.
| 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 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 owed at end |
| 3% | £300/mo | £3,600/yr | Capital of £120,000 owed at end |
| 4% | £400/mo | £4,800/yr | Capital of £120,000 owed at end |
| 5% | £500/mo | £6,000/yr | Capital of £120,000 owed at end |
| 6% | £600/mo | £7,200/yr | Capital of £120,000 owed at end |
Interest-only mortgages are commonly used by buy-to-let investors and borrowers with a defined repayment strategy, such as investments, pensions, or downsizing.
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 maximum borrowingThe maximum amount a borrower can borrow. More:
| Income MultipleA calculation used by mortgage lenders to assess how much a ... More | Minimum Single Salary | Minimum Joint Combined Salary |
|---|---|---|
| 4x salary | £30,000 | £30,000 (£15,000 each) |
| 4.5x salary | £26,667 | £26,667 (£13,333 each) |
| 5x salary | £24,000 | £24,000 (£12,000 each) |
| 5.5x salary | £21,818 | £21,818 (£10,909 each) |
| 6x salary | £20,000 | £20,000 (£10,000 each) |
At the standard 4 to 4.5x multiple, a solo applicant needs a salary of approximately £26,700 to £30,000. On a joint application, that total is split across both incomes.
How Much Deposit Do I Need for a £120,000 Mortgage?
The deposit you need depends on the purchase price of the property. A £120,000 mortgage is the loan amount, with deposit calculated as a percentage of total property value.
| 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 for most mainstream lenders. Increasing your deposit to 10%, 15%, or 25% unlocks lower interest rate tiers and reduces monthly payments.
Factors That Affect Your £120,000 Mortgage Repayments
Interest Rate
The interest rate you secure depends on the Bank of England base rateThe interest rate set by the Bank of England, affects the in... More, your credit score, deposit size, and whether you choose a fixed or variable rate product. A fixed-rate mortgage locks your repayments for a set duration, while a tracker mortgage moves in line with the base rate.
Mortgage Term Length
Longer terms lower monthly repayments but increase total interest over the life of the mortgage. For example, £120,000 at 5% costs £950/month over 15 years (£51,000 total interest) versus £702/month over 25 years (£90,600 total interest).
Repayment Method
Capital repayment mortgages clear the loan balance each month so you own the home outright at the end of the term. Interest-only loans only cover monthly interest charges, requiring an agreed repayment vehicle for the capital.
Credit History
A clean credit profile gives access to mainstream lender rates. If you have past credit challenges, specialist bad credit mortgage lenders are available with slightly higher rates and deposit requirements.
Frequently Asked Questions
How much is a £120,000 mortgage per month in the UK?
A £120,000 repayment mortgage over 25 years costs roughly £569/month at 3%, £632/month at 4%, or £702/month at 5%.
What salary is needed for a £120,000 mortgage?
At standard 4 to 4.5x income multiples, you need an annual salary of approximately £26,700 to £30,000 as a single applicant, or combined on a joint application.
What is the minimum deposit for a £120k mortgage?
With a 5% deposit, you would need around £6,315 saved on a property priced at £126,315.
Can I make overpayments?
Most mortgage deals permit overpayments of up to 10% of the remaining balance each year without early repayment charges.
Related Mortgage Guides
- How Much Mortgage on £70k Salary?
- How Family Can Help You Buy a Home
- Mortgage, Property & Money Advice Hub
- Independent Whole of Market Mortgage Advice
Written and reviewed by Damian Youell, CeMAP qualified mortgage broker.