The deposit is usually the biggest upfront cost when buying a home. In Cambridge, where property prices sit well above the national and regional averages, the deposit required can be substantial. This guide explains how deposits work, what you might need at Cambridge price points, and how putting down more can affect your mortgage options.
How Much Deposit Do You Need?
Most lenders require a minimum deposit of 5% of the property’s purchase price. So for a home costing £400,000 in Cambridge, the minimum deposit would be £20,000. Some lenders accept 5% deposits for first-time buyers and home movers, but product choice is usually more limited at 95% LTV.
A deposit of 10% or more opens up a wider range of lenders, and pricing and choice often improve as your LTV reduces. The bigger your deposit, the less you need to borrow and the lower your loan-to-value (LTV) ratio — which is the key figure lenders use to price your mortgage.
Deposit Examples at Cambridge Price Points
The table below shows what different deposit percentages look like at typical Cambridge property prices. These figures are illustrative and shown for guidance.
| Property price | 5% deposit (95% LTV) | 10% deposit (90% LTV) | 15% deposit (85% LTV) | 20% deposit (80% LTV) |
| £250,000 | £12,500 | £25,000 | £37,500 | £50,000 |
| £350,000 | £17,500 | £35,000 | £52,500 | £70,000 |
| £400,000 | £20,000 | £40,000 | £60,000 | £80,000 |
| £500,000 | £25,000 | £50,000 | £75,000 | £100,000 |
| £600,000 | £30,000 | £60,000 | £90,000 | £120,000 |
| £750,000 | £37,500 | £75,000 | £112,500 | £150,000 |
Figures are illustrative. Actual prices vary by property type, condition, and location.
Why Your Deposit Size Matters
The size of your deposit directly affects three things.
Interest rate. Lenders price mortgages based on LTV bands. Pricing generally improves as LTV reduces, though the difference between bands varies over time. A broker can show you how lender bands apply at the time you apply.
Product choice. At 95% LTV, fewer lenders compete for your business. At 90% and below, the range of available products increases, giving you more flexibility on features like overpayment allowances, portability, and fixed-rate terms.
Monthly payments. A larger deposit means borrowing less, which reduces your monthly repayment. It also gives you a buffer if property values fall — you are less likely to end up in negative equity.
Lenders price mortgages in LTV bands, typically at 95%, 90%, 85%, 80%, 75%, and 60%. The biggest improvements in pricing are often seen between 95% and 90%, and between 90% and 85%. Below 75% LTV, the differences tend to narrow. A broker can show you how these bands apply to your specific deposit and purchase price.
First-Time Buyers in Cambridge
First-time buyers in Cambridge face higher deposit requirements than in many other parts of the UK. ONS data shows the average first-time buyer price in Cambridge was around £407,000 in December 2025 (provisional). At this level, a 5% deposit is around £20,350 and a 10% deposit is around £40,700.
Most first-time buyer purchases in Cambridge exceed the £300,000 stamp duty nil-rate threshold, which means the majority will pay some SDLT on top of the deposit. At £407,000, stamp duty for an eligible first-time buyer would be approximately £5,350. This should be factored into your savings alongside the deposit. For worked examples, see our stamp duty guide.
Ways to Build or Boost Your Deposit
Lifetime ISA
A Lifetime ISA allows you to save up to £4,000 each tax year towards your first home, with a 25% government bonus. You can open one between the ages of 18 and 39, and the bonus is paid until you turn 50. The property price limit is £450,000, which covers many first-time buyer purchases in Cambridge, though not all. You can confirm the current Lifetime ISA rules on GOV.UK.
Family Support
Given the deposit amounts required in Cambridge, family support is a common feature of first-time buyer purchases. Some lenders offer products designed for family support, including gifted deposit arrangements where a parent or family member provides all or part of the deposit as a gift, and family springboard mortgages where a family member places savings in a linked account as security. These products vary by lender and a broker can help you find the right option.
Shared Ownership
Shared Ownership lets you buy a share of a property (typically 25–75%) and pay rent on the remainder. This reduces the deposit you need, since you only pay a percentage of the share you are purchasing. There are Shared Ownership developments in and around Cambridge, including at Eddington. Eligibility criteria apply and the scheme is available through housing associations.
Do Not Forget the Other Costs
Your deposit is not the only upfront cost. When budgeting for a purchase in Cambridge, you should also allow for the following.
Solicitor or conveyancer fees: often in the region of £1,000–£1,800 including disbursements such as searches and Land Registry fees.
Survey: a homebuyer’s report or building survey typically costs £300–£700 depending on the property.
Mortgage arrangement fee: some mortgage products carry a product fee, which can be added to the loan or paid upfront.
Broker fee: if applicable, your broker will confirm this before you commit to proceeding.
Stamp Duty Land Tax (SDLT): depends on your circumstances and whether you are a first-time buyer. See fitchandfitch.co.uk/stamp-duty-cambridge for worked examples.
Moving costs: removals, utility connections, and any immediate work on the property.
What Counts as a Deposit and What Does Not
Lenders need to verify where your deposit has come from. This is a legal requirement under anti-money laundering regulations, and it applies to every purchase. Acceptable sources typically include personal savings held in a bank account, proceeds from the sale of another property, a gifted deposit from a family member (with a signed gift letter), and inheritance. Funds from investments or pensions may also be acceptable depending on the lender.
Lenders usually want to see deposit funds held in your account for a period before you apply. Large one-off credits — such as cash deposits, transfers from unfamiliar sources, or funds from overseas — will be queried and may need additional documentation. If your deposit comes from an unusual source, it is worth discussing this with a broker early in the process to avoid delays.
Frequently Asked Questions
Can I buy a house with a £20,000 deposit in Cambridge?
£20,000 is a 5% deposit on a £400,000 property, which would mean a 95% LTV mortgage. In Cambridge, this may suit some flats depending on availability, location, and condition. At 10%, £20,000 covers a £200,000 purchase, though options at this price point within Cambridge are limited. Most buyers with £20,000 would be looking at 95% LTV products.
Is £40,000 enough for a house deposit in Cambridge?
£40,000 gives you a 10% deposit on a £400,000 property or a 5% deposit on an £800,000 property. In Cambridge, £40,000 as a 10% deposit can open up a range of first-time buyer purchases, depending on the property and your borrowing.
How much deposit do I need for a £500,000 house?
At 5%, you would need £25,000. At 10%, £50,000. At 15%, £75,000. A £500,000 purchase sits around the Cambridge average for mortgage buyers, depending on area and property type. For borrowing at Cambridge prices, see our Cambridge borrowing guide.
Do I need a bigger deposit for a buy-to-let?
Yes. Most buy-to-let lenders require a minimum deposit of 25%, and some require more for certain property types. For a full guide, see our buy-to-let Cambridge guide.
Next Steps
If you are saving for a deposit or ready to buy, the next step is to confirm what you can afford and which products are available to you. We can review your deposit, income, and circumstances and show you the options across the whole market.
If you are comparing brokers, see our guide to mortgage brokers in Cambridge, or visit our Cambridge page to book a consultation, or call 01223 655 579.