The mortgage, which is being offered directly through the building society and selected intermediaries, has a maximum loan size of £500,000 and is only available to those taking their first step onto the property ladder.
Dan Barker, product and propositions manager at The Cambridge, said the proposition is “built around responsible lending with careful affordability checks and the reassurance of fixed monthly payments”.
The Cambridge will lend up to 5.5 times household income, where affordable, and will accept deposits that have been gifted.
A range of rates
The First Step mortgage is available fixed at either two or five years, and both options come with a £499 annual fee. The mortgage includes a free basic property valuation, which Barker noted will help to keep upfront costs down.
Borrowers will be able to overpay by 10% per year, if they can, to help them to increase equity in the property quickly if they are able to. Self-employed applicants will be accepted using standard criteria.
Barker added: “Saving for a deposit is one of the biggest challenges facing first-time buyers, particularly renters, who are already managing high monthly housing costs. By relaunching our First Step mortgage, we’re helping people who can afford mortgage repayments but struggle to save a large deposit to take a realistic step towards owning their own home.”
Those buying new-build houses will be eligible for the First Step mortgage, but not those buying new-build flats.
Low-deposit lending
The Cambridge was named Best First-Time Buyer Mortgage Provider for the third consecutive year at the MoneyNet Awards in January for supporting first-time buyers through a range of innovative products, including its Rent to Home scheme.
This scheme allows applicants to rent a newly refurbished property for a minimum of one year and a maximum of three years. During this time, if they’re ready to purchase their own home, 70% of the rent they’ve paid will be returned to help towards the deposit.
The Cambridge is currently offering Rent to Home properties in Cambridgeshire.
