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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallThe Cambridge Building Society made its First Step five-year fixed mortgage available across the intermediary market on 30 September 2026. The first-time buyer product allows borrowing up to 98% of a property’s value, so a 2% deposit may be enough for an eligible applicant. It is not a promise of approval: lending criteria, credit assessment and affordability checks apply.
On 3 October 2026, the Society’s live range table showed a 6.79% initial rate and 7.4% APRC for the five-year, 98% loan-to-value (LTV) option, with a £499 completion fee. Rates and terms can change, so check the lender’s live First Step product information before making a decision.
What changed on 30 September 2026?
The change was wider distribution, not the first appearance of a five-year First Step rate. The Cambridge announced that the five-year fixed option was available to the whole intermediary market, meaning mortgage brokers could consider it for eligible clients. The Society had previously offered a five-year First Step mortgage through its direct channel. Its March and April 2026 launches carried different historical rates; those prices are not the current whole-market rate.
The Cambridge said its aim was to give intermediaries more flexibility and borrowers greater certainty over monthly payments. Dan Barker, the Society’s Product and Propositions Manager, told Mortgage Solutions on 1 October 2026 that the option adds flexibility for intermediaries and payment certainty for clients while affordability remains important.
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Who is the First Step mortgage suitable for?
The Cambridge describes First Step as a mortgage for first-time buyers purchasing a residential property in England or Wales. Its guide says the product can be used for eligible new-build houses, but new-build flats are excluded; specific criteria apply to new-build properties. The product page sets a minimum purchase price of £100,000.
The Society’s consumer guide states a maximum loan of £500,000 and mortgage terms of up to 40 years. Some applicants may be eligible to borrow up to 5.5 times annual income, depending on circumstances; that is not a standard entitlement or a substitute for an affordability assessment. Trade coverage has reported that affordability for the five-year option is assessed using the pay rate, but applicants should confirm the current assessment basis with the lender or an intermediary.
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Gifted deposits are accepted under the Society’s guide, subject to its rules. Eligibility for any particular property, deposit source or borrowing amount depends on the full application.
How much deposit do I need?
At 98% LTV, the mortgage covers up to 98% of the property’s value and the buyer supplies at least 2% as a deposit. For example, 2% of a £200,000 purchase price is £4,000. This arithmetic does not include other purchase costs, and an application can still be declined or require a larger deposit after the lender assesses the borrower and property.
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A 98% mortgage leaves little equity at the outset. If the property’s value falls, or the borrower needs to move and sale proceeds do not cover the mortgage and moving costs, there may be limited equity available. That is a risk to weigh, not a prediction that prices will fall.
What does the five-year deal cost?
The Cambridge’s official range table, checked on 3 October 2026, listed these headline terms for its 98% LTV First Step options. They are product illustrations, not a personalized recommendation; rates and fees are subject to change.
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| Term | Initial rate | APRC | Completion fee | Early repayment charges |
|---|---|---|---|---|
| Five-year fix | 6.79% | 7.4% | £499 | 5% in year 1; 4% in year 2; 3% in year 3; 2% in year 4; 1% in year 5 |
| Two-year fix | 6.69% | 7.5% | £499 | 2% in year 1; 1% in year 2 |
The table also showed a £0 application fee, £0 product-switch fee and £0 further-advance fee for the five-year option. The 6.79% figure is the initial rate, not the APRC or a promise that the rate will remain available. APRC is an annual percentage rate of charge intended to help compare the overall cost of a mortgage over its term, taking account of the interest rate and applicable charges. It does not show what a particular borrower will pay in every circumstance.
The five-year fix’s initial rate was 0.10 percentage points higher than the two-year option’s on the date checked, while its listed APRC was lower. Those figures alone do not identify the cheaper or more suitable choice: the products fix payments for different periods and have different early repayment charge schedules. Compare the full illustration, fees, expected time in the property and likely need for flexibility.
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What happens if you overpay, repay early or reach the end of the fix?
Overpayments
The live product page says borrowers can overpay up to 10% of the outstanding balance in each 12-month period during the fixed term without an early repayment charge. Charges may apply above that allowance; check the current product terms and how the lender calculates the allowance.
Repaying or leaving early
For the five-year deal, the stated early repayment charge is 5% of the outstanding balance in year one, then 4%, 3%, 2% and 1% in years two to five. This can matter if you sell, refinance or otherwise repay during the fixed period, so consider likely changes in your circumstances before choosing the term.
After the fixed period
At the end of the fixed deal, the product page says the loan reverts to The Cambridge Variable Mortgage at the Society’s Standard Variable Rate. That rate can change, so borrowers should consider whether they could manage payments if the rate at the end of the fix is higher than the initial rate.
How should a first-time buyer compare the options?
- Compare the full mortgage illustration, including the initial rate, APRC, completion fee and any other charges—not just the headline rate.
- Decide how long you want payment certainty and assess the cost of the five-year early repayment charges if you may move or refinance sooner.
- Check the overpayment allowance against your plans, including whether you expect to make larger lump-sum payments.
- Test whether the payments would remain manageable after the fixed period, when the loan reverts to the Society’s Standard Variable Rate unless you arrange another deal.
- Confirm the property, deposit source, borrowing amount and personal circumstances meet current lending criteria. An intermediary or mortgage adviser can help compare suitable products; no headline product terms establish personal suitability.
What the cited buyer research does—and does not—show
In its 30 September 2026 announcement, The Cambridge cited Building Societies Association research saying 47% of aspiring homeowners had never spoken to a lender or mortgage broker about their options, and 67% of aspiring buyers said they could purchase sooner than they had thought after being shown low- or no-deposit mortgages. These are figures attributed to BSA research as cited by the Society; the original survey methodology is not established here. They describe reported attitudes, not evidence that a 98% mortgage will be affordable or available to an individual buyer.
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