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£120,000 Mortgage Repayment Example

Author: Myles Robinson - Expert Finance Advisor

Posted: Jun 6, 2022

£120,000 mortgage repayment example

Do you want to get a £120,000 mortgage, but are unsure if the monthly repayments can be afforded?

Use our mortgage calculator to see what your monthly mortgage payments would look like for a mortgage with this amount.

£120,000 mortgage calculator & rates

The mortgage repayment calculator will help you find out how much your mortgage repayments will cost each month as well as overall.

Our mortgage calculator will calculate the total amount of your mortgage, as well as the term length, interest rate and principal. Monthly mortgage repayments could vary for numerous reasons.

Example monthly payment calculations on a £120,000 mortgage 

You can expect to pay different amounts depending on your credit score, length of the mortgage term, and other factors.

Your choice of interest rate, interest payments, mortgage repayment term, length, and whether you choose a repayment or interest-only mortgage will all impact your monthly payments on £120,000.

It is possible to get an idea of the impact these variables have on monthly payments for a £120k mortgage. Take a look at this table:

If you prefer you can call today for free mortgage advice. All of our mortgage advisors are regulated by the financial conduct authority.

What does the mortgage term have to do with repayments?

As you can see the mortgage term and the interest rate are the major factors determining how much you will pay each month. This is because spreading out the payments for a £120k loan over 30 years, for example, allows you to reduce your total debt in smaller chunks than if the same rules were applied to a £120k loan over 10 years.

Your age is the most important factor in determining the term: Most providers will only lend to you if your age is 75 or older before the end of the term. A few lenders have a cap of 80 years. Younger borrowers can extend their mortgage for up to 35 years or 40 years, which will reduce the monthly cost.

Remember that a longer-term means you will pay more interest. Some borrowers prefer a shorter term with lower interest but higher monthly payments, while others prefer the lower monthly repayments of longer terms, even if they are earning less than a certain amount.

How to get the best rates for a £120,000 mortgage?

How can you get a lower interest rate? It will partly depend on the current market conditions but also on factors related to your financial situation, such as your credit history, how much you can deposit, and what type of property you are buying.

These and other factors that could affect the rate of interest are discussed in the rest. However, generally speaking, borrowers who have the lowest theoretical risk to lenders (larger deposit, better credit record etc.) will be able to access the largest range of mortgage products and therefore will enjoy the lowest rates.

For a complete market overview and the best rates for £120k mortgages, enquire today.

What is the minimum deposit required to get a £120k mortgage loan?

A £120k property mortgage would require a minimum deposit of around £6,000. However, 95% of mortgages are rarer than 85% and 90% of products so they can be harder to qualify for.

Lenders will typically require a deposit of approximately £12,000, or possibly even more depending on your situation.

You will get better deals if you have a larger deposit. Therefore, it is important to pay as little as possible to enjoy higher interest rates and more products.

Can I get a buy to let mortgage for £120,000

Yes, we receive a lot of inquiries about £120k Buy to Let Mortgages. We will gladly put you in touch with a qualified advisor with extensive experience in Buy to Let. in the area of investment property.

But Buy to Let mortgages (BTL) are different from residential mortgages in many important ways. It’s worth learning the main differences.

Most lenders require higher deposits to obtain BTL mortgages. Many also fix these products at 75% LTV. Some lenders will allow you to get 85% LTV depending on your income and credit history. Some require minimum income to be met, which is typically around £25k per year.

They also have stricter criteria regarding the types of borrowers they will accept for BTL. Some exclude first-time buyers while others insist on a minimum 12 month period as a homeowner with clean repayment records.

BTL mortgages are typically paid on an interest-only basis. Here’s an example of how this might look on a £120k mortgage.

Can I get a £120,000 only interest mortgage?

Yes, many lenders will offer residential mortgages up to £120,000 with interest only if you meet the criteria and have a repayment plan in place.

An interest-only mortgage’s eligibility criteria may be different from those for repayment mortgages. You might need to make a larger deposit. A majority of lenders require a minimum 25% deposit (75% LTV), but some will accept 80% LTV, while others may allow for a maximum of 85%.

Some people find interest-only mortgages attractive because of their lower monthly costs. This can be very useful if cash flow is tight. Some prefer the security of repayment models that have lower monthly costs but allow the loan to shrink over time.

Monthly payments on a £120k only interest mortgage

A common question we get is “How much is a £120,000 interest-only mortgage?”

For more information, see our guide to interest-only mortgages.

As long as you know your interest rate, it’s possible to calculate how much monthly you will pay for a £120,000 mortgage on an interest-only basis.

Below is a table that compares monthly payments for a repayment mortgage and an interest-only mortgage on £120,000. It assumes a 4% interest rate.

The table shows that the mortgage term does not affect the monthly interest payment. This is because the loan repayment occurs with one transaction at its end, and is not overtime.

You can contact to talk about an interest-only mortgage for £120,000.

What other factors could impact my application for a £120,000 Mortgage?

What other factors could impact your application for a £120,000 mortgage?

These are some other factors lenders will take into consideration in addition to your credit score:

  • How to get your income
    Lenders prefer those who have a regular PAYE income. However, some lenders will allow you to get a mortgage after your probation period. There is a growing market for self-employed borrowers. Some lenders are specialists in this area.
  • Your age
    Many lenders place an upper age limit on mortgage lending. They won’t consider you for a standard mortgage loan if you are over 75. Others set this limit at 80 years or 85. Some lenders do not have an age limit, but they will consider you if you are able to show a solid strategy for paying your mortgage repayments when you retire.
  • Type of property that you are buying
    Lenders will often refuse to finance properties with unusual features or made from less common materials.
  • If you are buying a second property
    Lenders apply different rules to applicants who are looking to get a second mortgage, regardless of whether it is a buy-to-let or a home purchase. If this is the case, you can expect lower LTVs, higher rates, and more scrutiny about affordability.

Secured loans up to £120,000

Secured loans or second charge mortgages can be used to obtain a lump sum of £120,000 if you have a property.

Second charges are basically a second mortgage for a single property.

The property is used as security. If you meet the criteria of lenders, second charges can be arranged quickly and at much lower rates than unsecured loans.

However, they are riskier for the borrower than they are for the lender.

Talk to a £120,000 mortgage advisor from the whole market today!

You can still ask questions about your ability to afford a £120k loan if you are not ready to apply.

Relax and let us find the right broker for you. – There is no charge and absolutely no obligation to improve your credit rating.

Contact us here now to get the best deals on your next mortgage.

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