Repayments on a £125,000 Mortgage

In this guide you will learn how much a £125,000 mortgage will set you back each month and overall, understand the factors that determine your repayments, and find out what to do once you have a clearer idea of the costs involved.

How much are the repayments on a £125,000 mortgage?

The average repayments on a £125k mortgage are £665 per month and £199,522 overall. This is based on a capital repayment mortgage with a 4% interest rate and a 25-year term, all of which is representative of the UK market at the time of writing.

Your exact repayments may vary depending on a number of factors, including the rate you qualify for, the term you choose and the type of mortgage you opt for.

Calculate your mortgage repayments

You can use our repayments calculator below to work out how much your £125,000 mortgage will cost each month and overall. Simply enter an interest rate and term length then hit 'calculate' to get some quick results.

Now that you’ve run some calculations, you next step should be a free, no-obligation chat with a whole-of-market mortgage advisor - get started here.

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Factors that will determine your mortgage payments

The exact amount your £125,000 mortgage will cost each month and overall will depend on several variables, which we will explore in depth in this section. They are as follows:

Term length

Stretching your mortgage payments out over a longer period means you will pay less each month, but more in interest overall. The table below illustrates the impact of term lengths - these examples are based on a capital repayment mortgage with an interest rate of 4%.

Interest rate

The interest rate you qualify for will be determined by several factors, primarily the loan-to-value (LTV) ratio and the overall strength of your application. The mortgage product type (fixed rate, tracker etc) will also have an impact as rates vary across product ranges.

The table below highlights how the cost of a £125k mortgage can vary across different interest rates. These calculations are based on a repayment mortgage with a 25-year term.

Repayment type

Most mortgage lenders give borrowers the option to take out their mortgage on a capital repayment or an interest-only basis, and your choice here will have a major bearing on your monthly payments. The table below shows example calculations for an interest-only mortgage of £125,000, taken out over a standard 25-year term.

Mortgage amount

If you are researching £125k mortgages because this is a ballpark borrowing amount, the table below allows you to compare the repayments on other amounts in the same range. These calculations are for a capital repayment mortgage with a 25-year term and 4% rate.

How much income do you need to get a £125k mortgage?

All of the mortgage applicants would need a combined income of just under £27,800. This is because most mortgage lenders will work out your borrowing capacity by multiplying your annual income by 4.5. If you don’t earn this amount, you could still have options as a smaller number of lenders offer mortgages based on 5-6 times annual salary.

Enter your household income into our calculator below to get an idea of whether you can afford a £125,000 mortgage:

Compare £125K mortgage rates online

You can compare the latest rates on £125,000 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.

Tips to help you reduce your repayments

Even with a relatively low mortgage amount such as £125k, you will still want to keep your repayments to the absolute minimum. The tips below can help you do that:

• Increase your deposit: By putting down a larger sum upfront, you reduce your loan-to-value (LTV) ratio. A lower LTV presents less risk to lenders, which can help you qualify for more favourable interest rates.

• Strengthen your credit profile: Taking time to improve your creditworthiness before applying can make a significant difference. Clearing manageable debts, ensuring all bills are paid on time, and allowing older adverse entries to expire from your credit file can all help you secure a more competitive rate.

• Opt for a longer mortgage term: Spreading your mortgage over a longer period will reduce the size of your monthly payments on a capital repayment mortgage, which can help with short-term affordability. Be aware, however, that this will result in paying more interest over the total life of the loan.

• Explore an interest-only mortgage: While this option offers lower monthly payments, you are only covering the interest and not repaying the capital loan amount. You must have a credible repayment vehicle in place to settle the debt when the term ends. It is crucial to seek professional advice from a mortgage broker before considering this route.

Get independent advice about £125k mortgages

Now that you have run some calculations and have a better understanding of the factors that will determine the repayments on your £125k mortgage, your next step should be to speak to one of our brokers so they can find the best deal for you.

Get started here to book in a free, no-obligation chat with one of our advisers so they can guide you through the application process.