£120,000 Mortgage: Monthly Repayments & Income Requirements
When you’re planning to take out a £120,000 mortgage, understanding what your monthly repayments will look like — and what income you’ll need to qualify — can make a huge difference.
At Mortgage Bridge, we help people every day who are asking these same questions. Whether you’re a first-time buyer, remortgaging, or moving home, it’s all about knowing what’s realistic for your budget and how to make your application as strong as possible.
Here’s a full guide to what a £120,000 mortgage involves, how much you’ll pay each month, and how to make sure you’re ready to apply with confidence.
How Much Is a £120,000 Mortgage Per Month?
The monthly cost of a £120,000 mortgage depends on your interest rate and term length.
Here’s a quick breakdown to give you a clear idea of what to expect:
| Interest Rate | Term (Years) | Approx. Monthly Repayment |
|---|---|---|
| 3% | 20 | £666 |
| 4% | 25 | £633 |
| 5% | 25 | £702 |
| 6% | 25 | £772 |
So, if you take out a £120,000 mortgage over 25 years at 4.5%, your monthly repayment would be around £670.
If you choose a shorter term (say, 20 years), the monthly payments will be higher — but you’ll save thousands in interest overall. On the other hand, a longer term spreads out the cost and makes things more manageable month to month.
We can help you model different scenarios to see what fits best for your budget and goals.
What Income Do I Need for a £120,000 Mortgage?
Most lenders base affordability on 4 to 4.5 times your annual income, depending on your credit history and financial commitments.
That means you’d typically need a household income between £27,000 and £30,000 per year to borrow £120,000.
If you’re applying alone, that’s achievable for many single applicants — especially if you’ve got a steady job and minimal debts.
If you have additional commitments like loans, credit cards, or childcare costs, your borrowing limit might be slightly lower. That’s where we can help — by finding lenders who take a more flexible view of your finances.
Can I Get a £120,000 Mortgage on One Income?
Yes — it’s absolutely possible.
Plenty of our clients take out a £120,000 mortgage on a single income. Lenders don’t automatically penalise single applicants; they just look at your affordability and stability.
If you earn around £30,000 a year and your other expenses are moderate, you’re likely to qualify for a £120,000 mortgage.
And if you earn slightly less, there are still ways to make it work. A larger deposit, longer term, or clean credit record can make a big difference in getting your application approved.
We’ll help you find lenders who are most supportive of single applicants — whether you’re employed, self-employed, or have variable income.
What Deposit Do I Need for a £120,000 Mortgage?
The size of your deposit affects your borrowing options and the deals you’ll have access to.
Most lenders require a minimum deposit of 5–10%, which works out as:
- 5% deposit = £6,000
- 10% deposit = £12,000
- 15% deposit = £18,000
If your credit history isn’t perfect, you may need closer to 15% — but it depends on the lender and how long ago any issues occurred.
The bigger your deposit, the lower your loan-to-value (LTV) ratio, and that can mean better interest rates and lower monthly payments.
If you’re remortgaging, your home equity counts as your deposit, which might mean you don’t need to put down any cash at all.
How Much Interest Will I Pay on a £120,000 Mortgage?
Interest adds up over the years, so it’s worth understanding the total cost of your loan.
Here’s what it could look like based on a typical interest rate:
| Term | Interest Rate | Approx. Total Interest | Total Repaid |
|---|---|---|---|
| 15 years | 4.5% | £45,500 | £165,500 |
| 20 years | 4.5% | £60,000 | £180,000 |
| 25 years | 4.5% | £76,000 | £196,000 |
As you can see, shorter terms save a lot on interest — but come with higher monthly repayments. If you can afford to overpay or choose a shorter term, you’ll save a significant amount overall.
We’ll help you explore different term lengths so you can make the most informed choice for your finances.
Can I Get a £120,000 Mortgage With Bad Credit?
Yes — it’s definitely possible.
Having bad credit doesn’t automatically mean you’ll be declined. Specialist lenders exist specifically to help people who’ve had financial blips like defaults, CCJs, or missed payments.
They’ll look at:
- How long ago your credit issues happened
- The size of your deposit
- How well you’ve managed your money since
If your credit file shows improvement and your income is stable, there are still plenty of options available.
At Mortgage Bridge, we work with many bad credit mortgage lenders who consider each application on its own merits — not just a score on paper.
We’ll help you find the right lender and explain what steps to take if you need to strengthen your case before applying.
Can I Get a £120,000 Mortgage if I’m Self-Employed?
Yes — being self-employed doesn’t stop you from getting a mortgage at all.
Lenders will simply ask for different types of proof of income, such as:
- SA302s and Tax Year Overviews (usually from the last 2–3 years)
- Business accounts
- Personal or business bank statements
If your income varies, most lenders will use an average of the last two years — but some are happy to consider just one year if your business has been doing well.
We help self-employed applicants present their income in the best possible way, showing the full picture of their affordability — including dividends, retained profits, or day rates.
How Can I Lower My £120,000 Mortgage Repayments?
There are a few smart ways to make your mortgage more affordable each month:
- Choose a longer term: Spreading your repayments over 30 years instead of 20 can significantly reduce the monthly cost.
- Increase your deposit: A bigger deposit often unlocks better interest rates.
- Improve your credit score: Even small improvements can lead to lower rates.
- Compare lenders: The difference between deals can save hundreds over time.
If you’d like, we can review your situation and show you how different combinations of rate, term, and deposit affect your monthly payments.
Can I Overpay a £120,000 Mortgage?
Yes — most lenders let you overpay up to 10% of your balance per year without penalty.
Even a small overpayment can make a big difference. For example, paying an extra £50 a month could save you thousands in interest and shorten your mortgage term by years.
We’ll help you check your lender’s overpayment policy and work out how to make overpayments most effectively for your budget.
What If My Bank Has Already Said No?
Don’t panic — it’s not the end of the road.
High street banks often have strict criteria, but that doesn’t mean you’re out of options. Many specialist lenders are far more flexible, particularly if you have complex income or a past credit issue.
We work with lenders who focus on the bigger picture — your recent track record, stability, and deposit — not just what a computer says.
If your bank has declined you, we can help review why and guide you to a lender that’s more understanding of your situation.
Example: £120,000 Mortgage Over 25 Years
Here’s what a £120,000 mortgage could look like in real terms:
- Loan: £120,000
- Term: 25 years
- Interest rate: 4.5%
- Monthly repayment: around £670
- Total repaid: about £196,000
- Total interest: roughly £76,000
If you were to overpay £100 a month, you could save over £10,000 in interest and finish your mortgage around three years earlier.
How to Strengthen Your £120,000 Mortgage Application
Before applying, there are a few easy ways to make your case stronger:
- Check your credit file and correct any errors
- Pay down existing debts to boost affordability
- Avoid new credit applications in the months before applying
- Keep your bank statements tidy, with no unplanned overdrafts
- Save as much deposit as you can — even a small increase can improve your deal
We review every client’s situation in detail before applying to a lender, helping make sure your application is as strong as possible.
Final Thoughts: Is a £120,000 Mortgage Right for You?
A £120,000 mortgage is a common and realistic target for many buyers and homeowners — whether you’re buying your first home, moving up the ladder, or remortgaging to a better rate.
At Mortgage Bridge, we specialise in helping people with adverse credit, self-employed income, or complex financial backgrounds get approved.
We’ll walk you through every step, from calculating affordability to choosing the right lender, so you can move forward with confidence.
If you’d like to see what a £120,000 mortgage could look like for you, let’s explore your options together. We’re always happy to help you find a way forward that fits your life and goals.