£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%. On 5 November 2026 the Monetary Policy Committee raised Bank Rate from 3.75% to 4.00% (eight votes to one; one member wanted 0.5 points), and the next decision is on 17 December. Trackers move with Bank Rate straight away, while fixed rates had already priced in much of the rise. That is why a tracker priced off Bank Rate currently looks cheaper than a fix — £702 a month at an assumed 5.00% — 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 4.00% (raised from 3.75% on 5 November 2026 by an 8–1 vote; next decision 17 December 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).