Branded as the Cambridge Easy Start, the product will revert to a 4.59% standard variable rate after the five year term.
Mark Smitheringale, head of sales and marketing, said: “As an innovative building society in the ascendancy, Cambridge is totally committed to supporting the home ownership aspirations of first-time buyers across our wider East Anglia lending area and this new proposition eases new borrowers into the commitment of owning their first home, with a reduced interest rate and only a 5% deposit requirement.
“This is a genuine interest rate “giveaway” rather than a deferment of interest to be repaid over future years.
“It also comes with the security of a long-term fixed-rate which will protect new homeowners when the inevitable increase in interest rates begins.”
David Hollingworth, communications director at London & Country, said: “Mortgages to 95% of the purchase price are few and far between so this launch will be welcomed by first-time buyers.
“Borrowers will be eased into their mortgage deal with a lower rate initially although they do need to prepare for their rate increasing in the second year.”
