Written by Mark Langshaw Reviewed by Lee Trett
7 November 2026
Lowest rate is currently 4.24% - 2 years tracker interest only mortgage at 60% LTV
5 November 2026
Lowest rate is currently 4.08% - 26 months tracker interest only mortgage at 60% LTV
2 November 2026
Article reviewed by Lee Trett. 'Key facts' and FAQ about lender stress testing added
21 July 2026
Lowest rate is currently 3.99% - 2 years tracker interest only mortgage at 60% LTV
16 July 2026
Lowest rate is currently 3.96% - 26 months tracker interest only mortgage at 60% LTV
1 August 2024
First Published
A mortgage of £120,000 is not considered large but you should do your preparations before applying for one. Here you will learn how to work out what the repayments will be on a mortgage of this size and how to get the best deal.
Key facts
- About £633 a month: that's the cost of a £120,000 repayment mortgage at 4% over 25 years. You'd repay around £190,000 in total. At 5%, it rises to about £702 a month.
- The term makes a big difference: at 4%, a 35-year term cuts the monthly payment to about £531, but you'd repay over £223,000 in total. A 15-year term costs about £888 a month but saves over £30,000 in interest compared with 25 years.
- Interest-only is cheaper each month but not overall: it costs about £400 a month at 4%. You'd still owe the full £120,000 at the end of the term, so you'd need a plan to repay it.
- A bigger deposit can get you a better rate: you'll usually need at least a 5% deposit. Borrowing £120,000 at 60% loan-to-value could cost about £120 a month less than at 95%.
- You'll need an income of around £26,700: that's what it takes to borrow £120,000 at 4.5 times your salary. Some lenders offer 5 or 6 times income.
How much does a £120,000 mortgage cost per month?
A mortgage of £120k would cost you around £633 per month under current market conditions. This figure is based on the monthly payments for a capital repayment mortgage of this amount, with a 4% interest rate and 25-year term.
If you were to take out a mortgage based on the above variables, you would repay £189,900 by the end of the term, assuming no changes are made to the agreement during this time.
Although the example we have provided is representative of the current UK market, the exact repayments on a £120k mortgage can vary depending on a range of factors, including the interest rate and term length. We explore these variables in detail in this article.
Calculate your mortgage repayments
You can use our calculator below to work out the repayments on a £120k mortgage. This tool has been set up to automatically return results for a mortgage of this size by default, but the amount can be manually changed along with the rate, term and repayment type.
Factors that affect your mortgage repayments
The exact monthly repayments for a £120k mortgage will depend on the following factors:
- Interest rate: The rate you qualify for will depend on the loan-to-value (LTV) ratio and overall strength of your application. Specific mortgage product types, such as fixed and tracker rate agreements, tend to have their own specific interest rates.
- Term length: A £120k mortgage taken over a longer term will have smaller monthly payments but you would pay more overall due to the extra interest instalments.
- Repayment type: The main two options here are capital repayment and interest-only. If you choose the latter, your repayments will be lower but you will still be left with the full mortgage debt to pay at the end of the arrangement.
We will now explore how each of these variables will influence the cost of a £120,000k mortgage in depth, with example calculations to provide context.
Interest rate
The table below shows example repayment calculations for a £120k mortgage based on various interest rates, taken on a capital repayment basis over 25 years.
|
Mortgage Amount |
Interest Rate |
Monthly Repayments |
Overall Repayment |
|
£120k |
3.5% |
£601 |
£180,224 |
|
£120k |
4% |
£633 |
£190,021 |
|
£120k |
4.5% |
£667 |
£200,100 |
|
£120k |
5% |
£702 |
£210,452 |
|
£120k |
5.5% |
£737 |
£221,071 |
|
£120k |
6% |
£773 |
£231,949 |
Deposit size
This table shows the monthly cost for a £120,000 loan depending on the property's total value and your equity stake:
Based on a 25-year repayment term.
| Property Value | Deposit | LTV | Est. Interest Rate | Monthly Payment |
| £126,315 | £6,315 | 95% | 5.95% | £770 |
| £133,333 | £13,333 | 90% | 5.35% | £727 |
| £160,000 | £40,000 | 75% | 4.60% | £674 |
| £200,000 | £80,000 | 60% | 4.25% | £650 |
Term length
The table below shows how the cost of a £120k mortgage can vary across different term lengths. These calculations are for a capital repayment mortgage with a 4% rate.
|
Mortgage Amount |
Term Length |
Monthly Repayments |
Overall Repayment |
|
£120k |
10 years |
£1,215 |
£145,793 |
|
£120k |
15 years |
£888 |
£159,773 |
|
£120k |
20 years |
£727 |
£174,522 |
|
£120k |
25 years |
£633 |
£190,021 |
|
£120k |
30 years |
£573 |
£206,243 |
|
£120k |
35 years |
£531 |
£223,158 |
|
£120k |
40 years |
£502 |
£240,733 |
Repayment type
The above tables are for a capital repayment mortgage. If you are taking out a £120,000 interest-only mortgage, see the table below for example calculations for this repayment type based on various different interest rates and a term length of 25 years.
|
Mortgage Amount |
Interest Rate |
Interest-only Payments (Monthly) |
Overall Repayment |
|
£120k |
3.5% |
£350 |
£225,000 |
|
£120k |
4% |
£400 |
£240,000 |
|
£120k |
4.5% |
£450 |
£255,000 |
|
£120k |
5% |
£500 |
£270,000 |
|
£120k |
5.5% |
£550 |
£285,000 |
|
£120k |
6% |
£600 |
£300,000 |
Other mortgage amounts
The table below shows how the repayments on a £120k mortgage compare to mortgages of similar amounts within the same ballpark. These figures are based on a capital repayment agreement of this amount, taken over 25 years with an interest rate of 4%.
|
Mortgage Amount |
Monthly Repayments |
Overall Repayments |
|
£118k |
£623 |
£186,854 |
|
£119k |
£628 |
£188,438 |
|
£120k |
£633 |
£190,021 |
|
£121k |
£639 |
£191,605 |
|
£122k |
£644 |
£193,188 |
|
£123k |
£649 |
£194,772 |
Calculations all done? Here are your options now...
How much salary will you need?
You would need a combined household income of around £26,670 to secure a mortgage of £120,000. This is because most UK lenders will let you borrow up to 4.5 times your annual salary, provided you are eligible for mortgage approval.
If you don’t have this amount of income, a smaller number of lenders might consider you for a 5-times salary or a 6-times salary mortgage, under the right circumstances.
There are also lenders who will consider letting you declare supplemental income, such as benefits and freelance work, alongside your main salary to boost your affordability.
You can use our affordability calculator below to get an idea of whether your income stretches far enough:
Compare £120K mortgage rates online
You can compare the latest rates on £120,000 mortgages using our free mortgage sourcing tool below. We have set this tool to display results for a 60% LTV (40% deposit) mortgage by default but you can manually change this by altering the mortgage amount and property value to match your personal circumstances. More options are available via the filters menu in the bottom left.
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Representative example
A repayment mortgage of over year, APR %. Total payable (incl. product fees of ). Repayments: months at (%), then months at (%, variable). Early repayment charges apply. Rates not guaranteed.
About these rates
Rates shown are illustrative based on the property value, mortgage amount, and term you entered above. Actual rates and total cost depend on your credit profile, deposit, and lender assessment. APR figures include product fees where applicable. Early repayment charges may apply. Rates are not guaranteed and may change before you apply - speak to an adviser to confirm what's available to you today. For a per-product representative example, open Show full details on any card above.
Apply for a £120,000 mortgage today
Now that you have run some calculations, you can access independent advice from our expert broker.
Here are just some of the reasons people choose us for their mortgage needs:
- We compare mortgages from 90+ lenders
- Exclusive rates and deals are available
- We are 5-star rated on leading review websites
- You could secure a £120k mortgage in principle in minutes
Ready to take advantage of a free, no-obligation chat with a broker who specialises in £120k mortgages? Get started here.
FAQs
Your monthly mortgage payments aren’t the only cost that comes with a £120,000 mortgage. You should also factor in the additional fees below when working out your budget:
- Product fees: Can range between nothing and £2,000. Fee-free deals often come with higher rates, but the fee itself can sometimes be added to the mortgage.
- Valuation fee: Some lenders will expect you to foot the cost of having the property you’re buying valued, and this can set you back between £250-1,500.
- Legal fees: Can range from a few hundred to several thousand pounds.
- Stamp duty: You can find out exactly how much your bill will be in our stamp duty guide.
- Admin costs: This includes the booking fee, telegraphic transfer fee and the account fee. All in all, admin costs for a mortgage application can cost around £1,000.
Regardless of the mortgage amount being £120,000k, the amount of deposit you will need for a residential purchase, in most cases, is at least 5% of the property’s value.
Since 100% LTV mortgages are rare, you are unlikely to be able to borrow the full £120,000 to buy a property with this price tag. For a residential mortgage you will need at least 5% of the purchase price to put down as a deposit, which in this case amounts to £6,000. This means you would need to borrow £114,000 from a mortgage lender, amounting to 95% LTV.
For smaller mortgage amounts like £120,000, fee-free deals are often better value. A typical £999 product fee represents nearly 1% of your total loan. Unless the lower interest rate saves you more than £999 over the fixed period (usually 2 to 5 years), you are often financially better off choosing a slightly higher rate with no upfront fee.
When you apply for a £120,000 mortgage, Financial Conduct Authority rules require lenders to check if you could still afford your repayments if interest rates were to rise. Instead of only looking at the introductory fixed rate you are applying for, the underwriter applies a 'stress test' margin. This means they will assess your affordability against a hypothetical rate that is usually several percentage points higher than your actual pay rate.
For example, a £120,000 repayment mortgage over a 25-year term at 5% costs around £701 per month. However, if the lender applies a stress rate of 8%, they will evaluate your income and outgoings against a theoretical monthly payment of approximately £926. If this higher figure consumes too much of your disposable income, the lender may decline the £120,000 request and offer a lower maximum borrowing amount.
If your income is stretched and you are struggling to pass this affordability check, opting for a five-year fixed-rate mortgage can often help. Because your monthly payments are guaranteed for a longer duration, many lenders apply a slightly lower, more forgiving stress rate compared to the strict margins used on shorter two-year deals.