Can I afford a house in London on a £120,000 salary?
At £120,000, the average London home (£525,000) is just 4.4 times your salary — inside the standard 4.5× lending limit for the first time in this cluster. This marks a genuine turning point: for buyers at this income, London's mainstream market is open without needing specialist lenders, and a standard deposit gives you real choice across a broad range of boroughs.
Based on typical UK tax bands and lending criteria. This is an estimate, not financial advice.
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Your affordability
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You are in a strong affordability position compared to the UK average
Your income and disposable income are both above typical levels for UK buyers, giving you solid flexibility on housing, rent, and car choices.
Safe monthly disposable income
After expenses and debt, you have around £8,100 left each month — with a 10% buffer built in for unexpected costs. This is comfortable for most people at this income level.
Home you could realistically afford
Around £578k is a realistic target based on your salary, savings, and outgoings. Outside London, this budget typically goes further.
Most UK buyers with a similar income typically purchase between £508k and £647k
Recommended rent budget
Up to £3,500/month keeps your finances healthy based on the 30–35% income rule. Anything above this may start to feel like a stretch.
Car finance calculator
Most cars in the UK are purchased using finance (PCP or HP), where buyers pay a deposit and a fixed monthly cost. This estimate gives a realistic guide based on typical finance rates (~8% APR).
How much you can comfortably pay each month
£200–£350/month is a sensible range for most UK buyers. This is what many people on a typical salary comfortably spend on a car.
Most UK car buyers use PCP or HP finance — affordability is based on monthly payments, not total price.
Outside London, this budget typically goes further. In London and higher-cost areas, affordability is usually 15–25% lower than these figures suggest.
Why this calculator is different
Most calculators show the maximum you can borrow. This tool focuses on what you can comfortably afford — based on real UK salaries, actual expenses, and everyday spending patterns.
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Based on typical UK tax bands and lending criteria. This is an estimate, not financial advice.
What lenders will see
Standard maximum mortgage: Most UK lenders offer between 4× and 4.5× your salary — £480k to £540k on your income.
The gap: The average London home costs £525k. At 4.4× your salary, this sits within standard lending guidelines for most lenders.
Deposit guidance: A 10% deposit should be enough for most standard lenders at this price-to-income ratio.
Local context: London
At £120,000 your personal allowance is fully withdrawn (it tapers to zero between £100,000 and £125,140), so your effective marginal tax rate on earnings above £100k is 60%. Despite this, a 4.5× mortgage supports borrowing of up to £540,000 — enough to fund the average London home outright without any deposit. Adding a 10–15% deposit takes your budget to £594,000–£621,000, covering: well-presented houses and larger flats in Clapham, Greenwich, Stoke Newington, and Hammersmith; period conversions in Kensal Rise and Honor Oak; and new builds in Zone 1 fringe areas. Almost all of London becomes theoretically accessible with specialist lending at this income.
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Compare other UK cities
See how affordability differs across the UK based on salary and average house prices.
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