The Cambridge has launched a five-year First Step mortgage and relaunched its two-year option. See the rates checked on 29 September 2026, eligibility and how it differs from Your First Home.

A 2% deposit mortgage for first-time buyers: The Cambridge’s First Step

The Cambridge Building Society has launched a five-year First Step mortgage for first-time buyers with a 2% deposit. It has also relaunched its two-year option. Both let eligible buyers borrow up to 98% of a home’s value.

On a £250,000 home, a 2% deposit is £5,000. You would need a £245,000 mortgage, subject to affordability checks.

As checked on 29 September 2026, the five-year fixed rate is 6.79%. The two-year fixed rate is 6.69%. Both have a £499 completion fee and no application fee. Rates can change.

The Cambridge may lend up to 5.5 times income, depending on your circumstances. It accepts gifted deposits from immediate family and mortgages on new-build houses. New-build flats do not qualify. The property must be worth at least £100,000, and the maximum loan is £500,000. Early repayment charges apply during each fixed-rate period.

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Illustration accompanying The Cambridge First Step mortgage article

How does it differ from Your First Home?

Unlike the announced Your First Home scheme, First Step is a mortgage without a separate 20% equity loan. Your First Home proposes a government-backed equity loan, not a lender’s share. Its repayment terms remain unconfirmed, and the scheme is not yet open.

First Step needs a smaller cash deposit than Your First Home’s expected 2.5%, but you would borrow more through the mortgage. Compare monthly payments and the full cost before deciding. A small deposit also leaves little protection if house prices fall.

First Step deposit and loan-to-value illustration

Change any value and the other figures will update automatically.

Try an example: £250,000 home with a £25,000 deposit → 90% LTV

Property value

£40,000 £5,000,000

Changing the property value keeps approximately the same LTV and recalculates your mortgage and deposit or equity.

Deposit or equity

£0 £250,000

Mortgage amount

£0 £250,000

Loan-to-value

98%

0% 100%

Your loan-to-value

98%

A £245,000 mortgage on a £250,000 property.

98%

98% mortgage 2% deposit or equity

Search mortgages with these figures

Starts with a residential purchase. You can change the mortgage type and purpose in the search.

No mortgage borrowing needed

With these figures, the property value is fully covered by your deposit or equity. No mortgage borrowing is required.

Small mortgage amount

Fewer lenders offer mortgages below £25,000, so your options may be limited. Product and legal fees can also have a greater impact on the overall cost of a smaller mortgage.

Low property value

Fewer lenders offer mortgages on properties valued below £50,000. Minimum property values vary by lender and property type.

Buying to let?

If this is a buy-to-let purchase, most lenders cap borrowing at 75–80% loan-to-value, with some specialist options reaching 85%. This cap applies to buy-to-let mortgages only — residential lending typically extends to 95%.

High-LTV residential mortgage

Residential mortgages above 95% LTV have limited availability and often require a specialist mortgage product or scheme. Talk to your mortgage adviser about your options.

No deposit or equity buffer

You have no deposit or equity buffer. A fall in the property's value could leave you owing more than it is worth. No-deposit residential mortgages have limited availability and specific eligibility requirements. Speak to your mortgage adviser.

This is a mortgage-only illustration of the deposit and borrowing needed at the selected loan-to-value. It does not model the proposed Your First Home equity loan or check eligibility for either option.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Sources

The Cambridge Building Society: First Step mortgages and current product rates — product options, rates, fees and early repayment charges; checked 29 September 2026.
The Cambridge Building Society: five-year First Step product — eligibility, property and income criteria.
GOV.UK: Your First Home announcement, 26 September 2026 — proposed deposit, equity loan and status.

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