£120,000 mortgage repayment example, best lenders for 120k mortgages and how we can get you approved quickly today
Do you want a £120,000 mortgage but are unsure if the monthly repayments can be afforded?
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£120,000 mortgage calculator & rates
The mortgage repayment calculator will help you determine how much your mortgage repayments will cost each month.
Our mortgage calculator will calculate the total amount of your mortgage, 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 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 a loan value of £120,000.
It is possible to get an idea of these variables’ impact on monthly payments for a £120k mortgage. Take a look at this table:
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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 critical factor in determining the term: Most providers will only lend to you if your age is 75 or younger 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.
In contrast, others prefer the lower monthly repayments of longer terms, even if they earn 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 of this article. 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.
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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% mortgages are rarer than 85% and 90% products, so they can be harder to qualify for.
Depending on your situation, lenders will typically require a deposit of approximately £12,000.
You will get better deals if you have a larger deposit; therefore, paying as little as possible through enjoying lower interest rates and more products is important.
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-lets
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 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.
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Can I get a £120,000 interest-only 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 differ from 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 higher monthly costs but allow the loan to shrink over time.
Monthly payments on a £120k only interest mortgage
A common question is “How much is a £120,000 interest-only mortgage?”
For more information, see our guide to fixed rate 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 over time.
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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 probation. 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 can 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.
FAQ’s
What are the £120,000 mortgage repayments over 10 years?
If you are looking for a £120k mortgage over 10 years, below is the calculation on your monthly payments and interest rates example:
- Mortgage amount: £120,000
- 10% Deposit £12,000
- Term: 10-years
- Monthly Payment: £1,187
- Interest rate: 3.5%
- Total cost of mortgage: £142,396
As you can see, over ten years, the interest cost would be £22,396 to loan £120,000 over ten years on a mortgage.
How much do I need to earn to get a mortgage of £120 000 in the UK?
To get a mortgage of £120,000 in the UK, with most lenders, you would need to earn £30,000, which is based on a 4x your salary mortgage, a very common mortgage product.
If you are looking to get a mortgage for this amount, we can help; start your application now below:
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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 a second mortgage for a single property.
The property is used as security. If you meet lenders’ criteria, second charges can be arranged quickly and at much lower rates than unsecured loans.
However, they are riskier for the borrower than for the lender.
Take a look at other mortgage repayment examples:
- £150,000 mortgage repayments example
- £180,000 mortgage repayments example
- £200,000 mortgage repayments example
- £300,000 mortgage repayments example
- £350,000 mortgage repayments example
- £400,000 mortgage repayments example
- £450,000 mortgage repayments example
- £500,000 mortgage repayments example
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