Most first time buyers in Cambridge will need a deposit of at least 5% of the property’s value to secure a mortgage.

This is the minimum that lenders will accept. Saving a larger deposit can give you access to more competitive rates and improve your chances of approval.

If you’re buying a property in Cambridge priced around £450,000, a 5% deposit would mean saving approximately £22,500.

For many first time buyers, this is the starting point when preparing to purchase a home in the city.

How Your Deposit Affects Your Mortgage Options

Your deposit plays an important role in how much you need to borrow, which in turn affects your monthly mortgage repayments and the range of deals available to you.

Mortgage lenders usually group their products into bands based on the percentage of the property value you are borrowing. This is known as your loan-to-value, or LTV.

Common LTV bands include 95%, 90%, 85%, and lower. The larger your deposit, the lower your LTV will be.

If you are considering a smaller deposit, it may be worth exploring 95% LTV mortgages in Cambridge. These options are designed to help buyers secure a mortgage with a 5% deposit.

If you can achieve a lower LTV, you are likely to access more competitive mortgage products and benefit from lower interest rates.

A lower LTV can also reduce your monthly repayments and make your mortgage application more attractive to lenders.

While a 5% deposit may be enough to secure a mortgage, aiming for 10% or more can help you unlock stronger deals and provide greater stability in your repayments.

This can be particularly valuable when buying a home in Cambridge, where property prices are often higher than the UK average.

Where can my deposit come from?

Personal Savings

Saving gradually is the most common route for building a deposit, particularly for first time buyers in Cambridge.

Mortgage lenders like to see a steady savings habit. This helps show that you are financially prepared to take on the responsibility of owning a home.

If you choose us as your mortgage broker in Cambridge, one of our mortgage advisors can help you review your options once you have saved at least 5% towards your deposit.

Booking in a free initial appointment at that stage can help ensure you are in the best position to move forward when the time comes to know your mortgage options.

Gifted Deposit

Many buyers receive help from family when saving for a deposit. This is often known informally as the “bank of mum and dad.”

Most lenders will accept a gifted deposit, as long as it is a genuine gift and not a loan that needs to be repaid.

The person gifting the money will usually be asked to sign a declaration and provide ID and bank statements.

Some lenders will also consider gifted deposits from friends, although this is less common. Your mortgage advisor will explain what is acceptable to different lenders.

Discounted Price

If you are buying from a family member or as a sitting tenant, some lenders may treat the discount on the property as your deposit.

This means you might not need to provide a separate cash amount. This is also common with a right-to-buy mortgage in Cambridge, where local authority tenants are offered a discount as part of the scheme.

Do I need a deposit for a remortgage in Cambridge?

If you already own a property and are looking to remortgage, you will not usually need to provide a new deposit.

When you remortgage, you are replacing your current mortgage with a new one. The equity you already hold in your home acts in place of a cash deposit.

Your loan-to-value (LTV) will be based on how much you owe on your current mortgage compared to the property’s value.

For example, if your property in Cambridge is valued at £400,000 and you owe £200,000, your LTV would be 50%.

The more equity you have in your home, the wider the range of mortgage deals likely to be available to you. This can often help you access more competitive rates.

If you would like to explore your options, we can help. Our team provides remortgage advice in Cambridge to homeowners looking to secure a better deal or release equity from their property.

Can I borrow my deposit?

Most mortgage lenders will expect your deposit to come from your own savings, a genuine gift, or a recognised scheme.

Borrowing your deposit from another source, such as a personal loan or credit card, is unlikely to be accepted.

This is because additional borrowing increases your overall debt and affects how much you can afford to repay on your mortgage.

When lenders assess your application, they will carry out affordability checks to make sure you can comfortably manage your repayments.

How do I prove where my deposit came from?

As part of your mortgage application, you will need to show where your deposit funds have come from.

Lenders are required to carry out checks to meet anti-money laundering regulations. These checks apply to every mortgage application.

If your deposit has come from personal savings, you will usually be asked to provide recent bank statements showing how the funds were built up.

If you have received a gifted deposit, the person gifting the money will need to provide a signed letter confirming it is a gift, not a loan.

They will also need to provide identification and bank statements to show the source of their funds.

If you are using a discount on the purchase price as part of your deposit, for example, via a Right to Buy mortgage in Cambridge, the paperwork from the scheme will usually serve as proof.

Our mortgage advisors in Cambridge will explain exactly what documents you will need to provide based on your deposit source. We will make sure you are fully prepared before your application is submitted.

Date Last Edited: June 9, 2025