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In this guide you will learn how much a £125,000 mortgage will set you back each month and overall, understand the factors that determine your repayments, and find out what to do once you have a clearer idea of the costs involved.
How much are the repayments on a £125,000 mortgage?
At the time of writing (December 2024), average repayments on a £125k mortgage are £665 per month and £199,522 overall. This is based on a capital repayment mortgage with a 4% interest rate and a 25-year term, all of which is representative of the current UK market.
Your exact repayments may vary depending on a number of factors, including the rate you qualify for, the term you choose and the type of mortgage you opt for.
Calculate your mortgage repayments
You can use our repayments calculator below to work out how much your £125,000 mortgage will cost each month and overall. Simply enter an interest rate and term length then hit 'calculate' to get some quick results.
Now that you have a clearer idea of your mortgage costs, you can browse rates and deals from lenders across the market for free on Teito. You can also access support from an independent mortgage broker if you need a little help - get started here.
Factors that will determine your mortgage payments
The exact amount your £125,000 mortgage will cost each month and overall will depend on several variables, which we will explore in depth in this section. They are as follows:
Term length
Stretching your mortgage payments out over a longer period means you will pay less each month, but more in interest overall. The table below illustrates the impact of term lengths - these examples are based on a capital repayment mortgage with an interest rate of 4%.
|
Mortgage Amount |
Term Length |
Monthly Repayments |
Overall Repayment |
| £125k | 10 years | £1,266 | £151,868 |
|
£125k |
15 years |
£925 |
£166,430 |
|
£125k |
20 years |
£757 |
£181,794 |
|
£125k |
25 years |
£660 |
£197,939 |
|
£125k |
30 years |
£597 |
£214,837 |
|
£125k |
35 years |
£553 |
£232,457 |
|
£125k |
40 years |
£522 |
£250,763 |
Interest rate
The interest rate you qualify for will be determined by several factors, primarily the loan-to-value (LTV) ratio and the overall strength of your application. The mortgage product type (fixed rate, tracker etc) will also have an impact as rates vary across product ranges.
The table below highlights how the cost of a £125k mortgage can vary across different interest rates. These calculations are based on a repayment mortgage with a 25-year term.
|
Mortgage Amount |
Interest Rate |
Monthly Repayments |
Overall Repayment |
|
£125k |
3.5% |
£626 |
£187,734 |
|
£125k |
4% |
£660 |
£197,939 |
|
£125k |
4.5% |
£695 |
£208,437 |
|
£125k |
5% |
£731 |
£219,221 |
|
£125k |
5.5% |
£768 |
£230,283 |
|
£125k |
6% |
£805 |
£241,613 |
Repayment type
Most mortgage lenders give borrowers the option to take out their mortgage on a capital repayment or an interest-only basis, and your choice here will have a major bearing on your monthly payments. The table below shows example calculations for an interest-only mortgage of £125,000, taken out over a standard 25-year term.
|
Mortgage Amount |
Interest Rate |
Interest-only Payments (Monthly) |
Overall Repayment |
|
£125k |
3.5% |
£365 |
£234,375 |
|
£125k |
4% |
£417 |
£250,000 |
|
£125k |
4.5% |
£469 |
£265,625 |
|
£125k |
5% |
£521 |
£281,250 |
|
£125k |
5.5% |
£573 |
£296,875 |
|
£125k |
6% |
£625 |
£312,500 |
Mortgage amount
If you are researching £125k mortgages because this is a ballpark borrowing amount, the table below allows you to compare the repayments on other amounts in the same range. These calculations are for a capital repayment mortgage with a 25-year term and 4% rate.
|
Mortgage Amount |
Monthly Repayments |
Overall Repayments |
|
£125k |
£660 |
£197,939 |
|
£135k |
£713 |
£213,774 |
|
£145k |
£765 |
£229,609 |
|
£155k |
£818 |
£245,444 |
|
£165k |
£871 |
£261,279 |
|
£175k |
£924 |
£277,114 |
Calculations all done? Here are your options now...
Other costs to factor in
In addition to your £125k mortgage repayments, there are other charges involved and you will need to factor them all in to work out the overall cost. They include:
- Product fees: Can range between nothing and £2,000. Fee-free deals often come with higher rates, but the fee itself can sometimes be added to the mortgage.
- Booking fee: An admin cost as part of the mortgage application process. It can range between £99-250 and is sometimes rolled into the product fee.
- Valuation fee: Some lenders will expect you to foot the cost of having the property you’re buying valued, and this can set you back between £250-1,500.
- Telegraphic transfer fee: A small fee to cover the cost of transferring your mortgage funds to your solicitor so the deal can be closed, usually between £25 and £50.
- Account fee: Another admin cost, usually between £100 and £300, to cover the set up, maintenance and eventual closure of your mortgage account held by the lender.
- Stamp duty: See our complete guide to stamp duty to find out how much your bill will be and whether you qualify for exemption.
Tips to help you reduce your repayments
Even with a relatively low mortgage amount such as £125k, you will still want to keep your repayments to the absolute minimum. The tips below can help you do that:
- Put down a larger deposit: Not only would you need to borrow less, putting down extra deposit can reduce the loan-to-value (LTV) ratio and help you qualify for a lower rate.
- Improve your credit situation: Waiting for any bad credit to disappear from your credit files, paying off debts you’re in a position to clear, and paying any existing bills and credit agreements on time ahead of your application can also help you land a lower rate.
- Consider a longer mortgage term: This will reduce your monthly payments in the short term (on a capital repayment agreement), but you will be paying more in interest overall.
- Consider interest-only: Interest-only mortgages have lower monthly payments but you will need a repayment vehicle to settle the debt at the end of the term. Be sure to seek professional advice from a qualified mortgage broker before choosing this option.
Compare rates and deals for £125k mortgages
Now that you have run some calculations and have a better understanding of the factors that will determine the repayments on your £125k mortgage, your next step should be to choose the mortgage you want, and you can browse rates and deals for free on Teito.
Get started here to view mortgage products from lenders across the market in real time and select one that sits your needs. We also have mortgage brokers available for a free, no-obligation chat if you need some help with your selection.
FAQs
All of the mortgage applicants would need a combined income of just under £27,800. This is because most mortgage lenders will work out your borrowing capacity by multiplying your annual income by 4.5. If you don’t earn this amount, you could still have options as a smaller number of lenders offer mortgages based on 5-6 times annual salary.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.