£120,000 mortgage: monthly repayments over 25 and 35 years

What a £120k mortgage costs at today’s rates

Average fixed rates jumped in autumn 2026: Moneyfacts recorded the average 5-year fix reaching 6% on 5 October for the first time in about three years, and it stood at 5.99% on 28 October, with the 2-year fix at 5.97%. Bank Rate has been 3.75% since the Monetary Policy Committee held it on 17 September 2026 (three members voted for a rise), and the next decision is on 5 November. That is why a tracker priced off Bank Rate currently looks cheaper than a fix — £684 a month at an assumed 4.75% — but its payment moves every time Bank Rate does. Every 1 percentage point on the rate changes the 25-year repayment on £120,000 by about £75 a month.

A typical first-time-buyer loan. The average first-time buyer paid £230,097 in August 2026 (UK HPI), so a £120k mortgage with a £13,333 deposit puts you a little below that benchmark. Prices under £300,000 also mean first-time buyers in England and Northern Ireland pay no Stamp Duty at all.

25 vs 35 years: total interest on £120,000

Choosing the term is a trade-off between monthly comfort and lifetime cost. At 5.99%, a 35-year term saves £89 a month compared with 25 years, yet the interest bill rises from £111,728 to £167,037. A 20-year term costs £87 more a month than 25 years but saves £25,562 of interest.

How the £120k balance falls: amortisation

In year one, £7,130 of your £9,269 of payments is interest and only £2,139 reduces the debt. Capital repaid overtakes interest in year 14, and half the loan is cleared by year 17 of 25. After a typical 5-year fix you would still owe about £107,903, which is the figure you would remortgage. This front-loading is why early overpayments save so much. Paying an extra £100 a month would save about £28,439 of interest and finish 5 years 6 months sooner.

How much salary do you need for a £120k mortgage?

UK affordability rules boil down to two tests: an income multiple and a stress-tested budget. At the common 4.5× income limit, a £120,000 mortgage needs £26,667 of gross household income — one earner on £26,667 or two on about £13,333 each. A smaller group of lenders will go to 5.5× for higher earners, certain professions or first-time buyers with strong credit, cutting the requirement to £21,818. The Bank of England limits each lender to 15% of new loans at 4.5× or more, so the higher multiples are not available to everyone.

The “payment share” columns show the 5.99%, 25- and 35-year repayment as a share of a single earner’s 2026/27 take-home pay (England, Wales & NI). Two earners on £13,333 take home more in total — about £2,187 a month — because each gets their own personal allowance, so the same loan takes 35% of joint take-home at 25 years. See £27,000 salary after tax, £22,000 salary after tax, £15,000 salary after tax for full payslip breakdowns.

Deposit, house price and Stamp Duty for a £120,000 mortgage

The loan-to-value (LTV) ratio decides both the price you can reach and the rate you are offered. A £120,000 mortgage at 90% LTV means a £133,333 home and a £13,333 deposit. Stamp Duty below uses the England and Northern Ireland rates in force since 1 April 2025 — the temporary £250,000 nil-rate band ended on 31 March 2025, and first-time buyer relief now covers only the first £300,000 (on homes up to £500,000).

At £133,333 a first-time buyer pays no Stamp Duty, while a home mover pays £167 — money that has to come from savings, not the mortgage. Buyers of a second home or buy-to-let pay a further 5% on the whole price. In Scotland and Wales, LBTT and LTT apply instead; use the Stamp Duty calculator for exact figures.

Stress test: could you afford a higher rate?

Under FCA rules lenders must check that a mortgage stays affordable if rates rise, especially for deals fixed for less than five years. Many lenders test against a rate a few points above the product rate or their reversion rate. At an illustrative 8.99% (today’s average 5-year fix + 3 points) the 25-year payment on £120,000 would be £1,006 — £234 a month more. If that would break your budget, consider a longer fix, a smaller loan or a bigger deposit. When a fixed deal ends the loan moves to the lender’s standard variable rate, which averaged 7.13% — £858 a month on this loan.

£120,000 vs average UK house prices

The average UK home cost £273,037 in August 2026 (up 0.9% in a year), ranging from £198,000 in Scotland to £554,430 in London. With a 10% deposit, £120k buys £133,333 — 49% of the UK average and 24% of the London average.

Neighbouring mortgage amounts

All at the 5.99% average 5-year fixed rate.

Tips for a £120k mortgage

FAQ

How much is a £120,000 mortgage per month?

At the 5.99% average 5-year fixed rate (Moneyfacts, 28 October 2026) a £120,000 repayment mortgage costs about £772 a month over 25 years, £719 over 30 years and £683 over 35 years. At the 5.97% average 2-year fix it is £771 over 25 years.

How much salary do I need for a £120k mortgage?

Most UK lenders lend up to about 4.5 times income, so a £120,000 mortgage needs a salary of around £26,667 for a single applicant or a combined £26,667 for a couple (for example two incomes of £13,333). Lenders offering 5.5 times income would need about £21,818. Affordability checks on your outgoings decide the final amount.

What deposit do I need for a £120,000 mortgage?

With a 10% deposit a £120,000 loan buys a £133,333 home, so the deposit is £13,333. At 5% the deposit is £6,316 (price £126,316); at 25% it is £40,000 (price £160,000).

What are the interest-only payments on £120,000?

Interest-only at 5.99% costs £599 a month, against £772 on a 25-year repayment mortgage. You still owe the full £120,000 at the end of the term, so lenders require a credible repayment plan and usually a larger deposit.

Is a 25-year or 35-year mortgage better for £120,000?

A 35-year term cuts the payment by £89 a month at 5.99%, but adds £55,309 of total interest compared with 25 years if the rate stayed the same.

How much Stamp Duty is due on a home bought with a £120k mortgage?

With a 10% deposit (price £133,333) a first-time buyer in England or Northern Ireland pays £0 and a home mover pays £167 under the rates in force since 1 April 2025. A second home or buy-to-let adds a 5% surcharge.

Related mortgage articles

Assumptions & sources

• Average rates: Moneyfacts average 2-year fixed 5.97% and 5-year fixed 5.99% (all LTVs, 28 October 2026; 5.97% and 6.00% on 2 November) and average standard variable rate 7.13% (October 2026). Averages hide a wide spread — best-buy deals at 60% LTV can be well over half a point cheaper.
• Bank of England Bank Rate 3.75% (held on 17 September 2026 by a 6–3 vote; next decision 5 November 2026). The tracker example adds an assumed 1.00% margin; best-buy trackers were around Bank Rate + 0.24 to + 0.60 points in early November 2026.
• Repayments use the standard annuity formula with monthly compounding and assume the rate stays the same for the whole term — in reality fixed rates end after 2–5 years.
• Stamp Duty Land Tax (England & Northern Ireland) from 1 April 2025: 0% to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5m, 12% above; first-time buyers 0% to £300,000 and 5% to £500,000 (no relief above £500,000). Unchanged in the 28 October 2026 Budget. Scotland (LBTT) and Wales (LTT) use different taxes.
• House prices: UK House Price Index for August 2026 (HM Land Registry/ONS, published 21 October 2026): UK £273,037, England £294,000, London £554,430, first-time buyers £230,097.
• Take-home pay: 2026/27 income tax and NI for England, Wales & NI, no pension or student loan (see the UK salary pages).