How Much Do You Need to Earn for a £120,000 Mortgage? Income & Affordability Guide

When planning to buy a property, one of the first questions many people ask is: how much do you need to earn for a £120000 mortgage? The answer varies from one lender to another because different affordability models and income multiples are used. Lenders also consider your monthly commitments, credit behaviour, deposit size, and household spending patterns.

This guide breaks down typical income requirements, how lenders calculate affordability, and what factors shape maximum borrowing. This article provides general information only and does not offer regulated mortgage advice.

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How Lenders Assess Affordability for a £120,000 Mortgage

Modern mortgage assessments combine income multiples with detailed affordability modelling. Lenders look at:

• Gross annual income
• Employment stability and contract type
• Credit history and financial conduct
• Monthly outgoings and dependants
• Debt repayments and financial commitments
• Deposit size and property type
• Future interest rate stress scenarios

Because each lender uses its own calculator, borrowing limits vary widely.

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Typical Income Needed for a £120,000 Mortgage

Lenders commonly use income multiples between 4× and 4.5× income, though some may offer higher in specific circumstances.

Income Required (Approximate)

Income Multiple	Required Income
4× income	£30,000
4.5× income	£26,667
5× income	£24,000
5.5× income	£21,818

These figures assume:

• Good credit history
• Moderate or low outgoings
• A deposit that supports minimum LTV requirements
• Stable employment or verified self-employed income

Borrowing potential may be higher or lower depending on affordability checks.

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Joint Applicants: Combined Income Requirements

For joint applications, lenders assess total household income.

Example

To access a £120,000 mortgage:

• Applicant A: £15,500
• Applicant B: £14,500
• Combined income: £30,000

This may meet affordability depending on commitments and lender policy.

Joint applicants may benefit from:

• Access to lenders with enhanced dual-income allowances
• Lower individual income requirements
• Greater flexibility in meeting affordability thresholds

However, childcare costs or large monthly commitments may reduce the borrowing limit.

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Deposit Size and Its Impact on Income Requirements

Deposit size can influence the income you need by affecting the loan-to-value (LTV) and lender options.

5% Deposit (£6,000)

• Higher LTV
• Stricter affordability checks
• Limited lender choice

10%+ Deposit (£12,000+)

• Lower LTV
• Broader lender selection
• Potential access to higher borrowing multiples

Although a larger deposit does not replace income, it can ease affordability pressure.

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Monthly Repayment Estimates on a £120,000 Mortgage

Repayments will depend on your interest rate and chosen mortgage term.

Representative Monthly Payments (Capital & Interest)

Term	4% Rate	5% Rate	6% Rate
25 years	~£633/month	~£695/month	~£773/month
30 years	~£571/month	~£644/month	~£719/month
35 years	~£533/month	~£608/month	~£684/month

Lenders assess whether your income comfortably supports these payments alongside all other financial commitments.

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What Affects Affordability Beyond Income?

Understanding how much do you need to earn for a £120000 mortgage means exploring the full affordability picture.

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1. Credit Profile

Lenders consider:

• Past repayment history
• Defaults, CCJs, or arrears
• Credit utilisation
• Electoral roll status
• Recent applications for credit

A strong credit file generally increases borrowing capacity.

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2. Monthly Financial Commitments

Common commitments include:

• Personal loans
• Car finance
• Credit card balances
• Childcare payments
• Maintenance commitments
• Student loan deductions

These reduce disposable income and therefore borrowing limits.

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3. Employment Type and Stability

Employment status influences how income is assessed.

• Employed: Usually straightforward with payslips.
• Self-employed: Most lenders use 2–3 years’ accounts or SA302s.
• Fixed-term contracts: Often accepted with renewal history.
• Zero-hours workers: Accepted by some lenders with consistent income patterns.

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4. Additional Income Sources

Lenders may consider:

• Bonuses
• Overtime
• Commission
• Pension income
• Tax credits
• Allowances

Each lender applies its own percentage weighting to supplementary income.

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5. Household Size

More dependants = higher living cost assumptions = reduced borrowing capacity.

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6. Mortgage Term Selection

Longer terms reduce monthly payments and may increase how much lenders are willing to lend, but they also increase the total interest paid.

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Example Affordability Scenarios

Scenario 1: Single Applicant, Strong Profile

• Income: £30,000
• Commitments: Low
• Deposit: 10%

Likely to fit many affordability models.

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Scenario 2: Single Applicant With Moderate Commitments

• Income: £27,000
• Commitments: £250/month

Affordability may be achievable with certain lenders.

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Scenario 3: Joint Applicants

• Income: £17,000 + £14,500 = £31,500
• Commitments: Low

Commonly acceptable for a £120,000 mortgage.

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Scenario 4: Applicant With Adverse Credit

• Income: £35,000
• Default within last 12 months

Borrowing may be restricted due to reduced income multiples or higher LTV requirements.

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How to Strengthen Your Affordability Position (General Guidance Only)

Although not personalised advice, buyers often prepare by:

• Reducing credit commitments
• Keeping bank statements stable
• Reviewing credit files before applying
• Avoiding new debt in the months before application
• Preparing payslips, P60s, or tax returns early
• Ensuring reliable documentation for any additional income

These actions support a clearer and stronger affordability profile.

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Regional and Cost-of-Living Factors

Some lenders adjust affordability models to reflect regional living costs.
Applicants in:

• London
• The South East
• High-cost cities

…may need stronger income or lower outgoings to qualify for the same borrowing level compared with lower-cost regions.

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Summary

If you’re asking how much do you need to earn for a £120000 mortgage, typical lender expectations fall between £26,500 and £30,000 for single applicants depending on income multiples. For joint applicants, combined income can meet affordability even where individual incomes are lower. Borrowing potential also depends on credit quality, deposit size, monthly outgoings, employment stability, and wider affordability checks.

This article provides general information only. For personalised advice, regulated mortgage guidance is required.