£120000 Mortgage: Monthly Repayments & Income Needed
If you’re considering a £120,000 mortgage, you’re likely looking for clarity around two key questions: how much will the monthly repayments be, and how much do you need to earn to qualify. While £120,000 may still be considered a modest mortgage compared to national averages, lenders apply the same affordability rules as they do for much larger loans.
This guide explains monthly repayments on a £120,000 mortgage, the income lenders typically require, and the wider factors that influence whether an application is approved.
Monthly Repayments on a £120,000 Mortgage
Monthly repayments depend primarily on your interest rate and mortgage term. Even small changes in either can noticeably affect affordability.
As a general guide:
- Over 25 years: around £620–£720 per month
- Over 30 years: around £520–£620 per month
- Over 20 years: higher monthly payments, but significantly less interest paid overall
Lenders do not assess affordability based only on today’s interest rate. They apply stress tests to ensure repayments would remain affordable if rates were to rise in the future.
How Much Income Do You Need for a £120,000 Mortgage?
Most lenders start with income multiples of around 4 to 4.5 times annual income.
Based on that:
- £120,000 ÷ 4.5 = around £26,500
- £120,000 ÷ 4 = around £30,000
In practice, many borrowers need an income closer to £30,000–£35,000, depending on lender criteria, outgoings, and minimum income thresholds.
Income multiples alone do not guarantee approval. Full affordability assessments always apply.
Why Income Requirements Can Be Higher Than Expected
Some borrowers are surprised to find that a £120,000 mortgage still requires a relatively solid income. This is often due to:
- Lender minimum income policies
- Stress testing at higher interest rates
- Existing financial commitments
- Household and lifestyle costs
Even where repayments appear manageable, lenders must ensure long-term sustainability.
What Lenders Look At Beyond Income
When assessing a £120,000 mortgage, lenders typically consider:
- Employment stability and contract type
- Regular outgoings such as loans, credit cards, childcare, and maintenance
- Evidence of consistent money management
- Spending patterns shown on bank statements
- Whether repayments sit comfortably within affordability limits
This is why two applicants with the same income can receive very different outcomes.
Typical Uses for a £120,000 Mortgage
A £120,000 mortgage is commonly used in situations such as:
READY TO GET STARTED?
Make a mortgage enquiry with Mortgage Bridge
If this guide relates to your situation, you can make a quick mortgage enquiry and we’ll be in touch to understand what you’re looking to do and how we can help.
Make a mortgage enquiry →No obligation. Mortgage Bridge acts as a mortgage introducer.
- Buying with a large deposit
- Purchasing a lower- or mid-value property
- Shared ownership purchases
- Remortgaging a relatively small remaining balance
- Buying out an ex-partner
Each scenario may be assessed slightly differently depending on property type and ownership structure.
Single Applicants vs Joint Applicants
Single applicants
A single applicant may qualify for a £120,000 mortgage on a moderate income if outgoings are low and employment is stable. However, lender minimum income rules can still be a limiting factor.
Joint applicants
Joint applications often make approval easier by combining incomes. Even if one income is modest, the combined affordability picture may meet lender requirements more comfortably.
How Mortgage Term Choice Affects Affordability
The mortgage term you choose has a significant impact on monthly repayments.
- Longer terms reduce monthly payments
- Shorter terms increase monthly costs but reduce total interest
Lenders will also consider retirement age and long-term income stability, particularly for older applicants.
How Your Deposit Affects a £120,000 Mortgage
A larger deposit can improve both approval chances and interest rates.
Even though the mortgage amount remains £120,000, a higher deposit can:
- Reduce lender risk
- Unlock more competitive interest rates
- Improve affordability calculations
- Increase lender flexibility where income is close to minimum thresholds
This can make a meaningful difference to approval outcomes.
Can You Get a £120,000 Mortgage With Bad Credit?
Yes — it may be possible, depending on the circumstances.
Lenders usually consider:
- How recent the credit issues were
- Whether debts are settled
- How finances have been managed since
- Evidence shown in bank statements
Because the mortgage amount is relatively modest, some lenders may be more flexible where repayments are clearly affordable.
What If You’re Self-Employed?
Self-employed applicants can still qualify for a £120,000 mortgage, but income assessment is more detailed.
Most lenders will review:
- Two years of accounts or tax calculations
- Averaged income over that period
- Evidence of stable or increasing earnings
Some lenders take a more flexible view for smaller mortgages where income is consistent.
Why Bank Statements Matter So Much
Bank statements play a central role in mortgage decisions.
Lenders will look for:
- Overdraft usage
- Gambling or high-risk spending
- Missed bill payments
- Regular saving habits
- Whether income comfortably supports lifestyle costs
Strong bank statements can strengthen an application even where income is relatively modest.
What Can Reduce Your Chances of Approval?
Even for a £120,000 mortgage, applications may be declined due to:
- High unsecured debt
- Regular overdraft use
- Recent missed payments
- Irregular income patterns
- Unstable employment history
This can make smaller mortgages feel more restrictive than expected.
How to Improve Your Chances of Approval
Helpful steps include:
- Reducing unsecured debts
- Avoiding overdraft reliance
- Keeping spending consistent for several months
- Avoiding new credit before applying
- Saving a larger deposit where possible
These steps can significantly improve affordability calculations.
Is a £120,000 Mortgage Easier Than a Larger One?
Not always. While repayments are lower, lender policies around minimum income and loan size can make smaller mortgages more restrictive with certain lenders.
Choosing the right lender criteria is often more important than the mortgage amount itself.
Key Takeaways
- Monthly repayments are typically £520–£720, depending on term
- Income needed is often £30,000–£35,000, depending on lender rules
- Affordability checks apply in full, even at £120,000
- Deposits and spending habits strongly influence outcomes
- Lender choice plays a major role in approval
This guide provides general information only. Personalised mortgage advice should always come from a regulated mortgage adviser.
Check your credit in detail
Access your full credit report
See your complete credit information from all three major agencies with Checkmyfile. Try it free, then it’s a paid monthly subscription – cancel online anytime.
Get started now
Important information: Mortgage Bridge provides information only and acts as a mortgage introducer. We do not provide mortgage advice or make lender recommendations. We can introduce you to an FCA-regulated mortgage adviser who can provide personalised mortgage advice.