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Ready to stop renting and start owning? The post-Eid property market is heating up with the return of 2% deposit mortgages! Learn how first-time buyers can get on the ladder with the latest 98% LTV deals and what this means for your home-buying journey in 2026.
Eid Mubarak! Now that the celebrations, family gatherings, and delicious food are starting to settle down, many of our clients in Oldham and across the UK are turning their focus toward the next big milestone: buying their first home.
If you’ve spent the last few weeks dreaming of a kitchen where you can host your own Eid dinner next year, I have some seriously good news for you. The mortgage market has just handed first-time buyers (FTBs) a massive gift this March.
While the last couple of years have been a bit of a rollercoaster with interest rates, the spring of 2026 is bringing back something we haven’t seen in full force for a while: the 98% mortgage. Specifically, The Cambridge Building Society has made waves by relaunching their 2% deposit mortgage.
Let’s dive into what this means for you and how you can navigate the post-Eid property hunt.
The Return of the 2% Deposit: A Game Changer
For most people, the biggest wall standing between them and a set of house keys isn’t the monthly mortgage payment, it’s the deposit. Saving up £20,000 or £30,000 while paying record-high rents is, quite frankly, a nightmare.
That is why the news from The Cambridge Building Society is such a big deal. By offering a 98% Loan-to-Value (LTV) mortgage, they are allowing first-time buyers to secure a home with just a 2% deposit.
Let’s put that into perspective with some quick math:
- On a £200,000 house (which gets you a lovely home in many parts of Oldham), a standard 10% deposit would be £20,000.
- With this 2% deal, you only need £4,000.
That is a difference of £16,000. For many young families or professionals, that’s the difference between buying a home now or waiting another five years.
Why is This Happening Now?
Lenders are starting to realise that the "rent trap" is real. Recent research shows that over 52% of UK adults see the deposit as the single biggest obstacle to homeownership. By lowering the entry bar to 2%, lenders are opening the doors to a whole generation of buyers who have the income to support a mortgage but haven't had the chance to save a massive lump sum.
It’s not just The Cambridge, either. Other big names like Santander have been active in this space with their "My First Mortgage" range, also targeting that 98% LTV bracket. This competition is great for you because it keeps rates competitive and gives you more options.
The Details: What You Need to Know
Before you start packing your boxes, there are a few "need-to-knows" about these high-LTV mortgages. They aren't available for every single property or person, so here’s the breakdown:
1. Property Types Matter
Most 98% mortgages, including the latest ones, are specifically for existing houses. If you’re looking at a brand-new build or a flat, you might find that lenders still require a 5% or 10% deposit. Lenders see new builds as slightly higher risk because their value can sometimes dip slightly immediately after the first sale.
2. The Interest Rates
Because you are borrowing 98% of the home's value, the lender is taking on more risk. To balance that, the interest rates are usually a bit higher than if you had a 20% deposit. Currently, we’re seeing these rates sit around the 4.8% to 5.2% mark, often fixed for five years.
3. Maximum Lending Limits
Most of these products have a cap. For example, some might limit the total loan to £500,000. While that might not buy you a mansion in central London, it’s more than enough for a fantastic first home in Greater Manchester or the surrounding areas.
4. Affordability and Credit
Just because the deposit is low doesn't mean the checks are easy. You’ll still need a solid credit score and a stable income. Lenders will usually look to lend around 4.5 times your annual salary.
Local Spotlight: Buying in Oldham Post-Eid
At Hunter Capital, we love our local market. Oldham has seen some great regeneration recently, and for a first-time buyer, it offers incredible value.
If you’ve been looking at areas like Chadderton, Royton, or Saddleworth, a 2% deposit mortgage makes these locations much more accessible. Imagine being able to move into a three-bedroom semi-detached house with a deposit that’s less than the cost of a used hatchback!
Post-Eid is traditionally a very busy time for the local market. Many families decide to move after the holidays, meaning more houses hit the market. Combined with these new 98% LTV products, the next few weeks could be the perfect window to strike.
Is a 98% Mortgage Right for You?
I’m always honest with my clients. A low-deposit mortgage is a fantastic tool, but you need to weigh up the pros and cons.
The Pros:
- Speed: You can get out of the rental market years earlier.
- Security: You’re paying off your own asset instead of your landlord's.
- Cash Flow: You can keep some of your savings for furniture, decorating, or an emergency fund instead of dumping every penny into the deposit.
The Cons:
- Negative Equity Risk: If house prices drop even by 3%, you could technically owe more than the house is worth. This only really matters if you plan to sell or move again very quickly.
- Monthly Costs: Your monthly payments will be higher than if you had a larger deposit.
For many, the "cost of waiting" (rising house prices and rent) outweighs the risk of a low deposit. If you're planning to stay in the house for 5–10 years, short-term price fluctuations matter much less.
Sharia Finance and First-Time Buyers
Given we’ve just celebrated Eid, many of our clients ask about Sharia Finance options for their first home. While the 98% products mentioned above are conventional mortgages, there are also Home Purchase Plans (HPP) that comply with Islamic principles. These work differently, through a partnership or leasing model rather than interest, but the goal is the same: getting you into your own home. If you want to explore how these compare to conventional 98% LTV deals, we can certainly walk you through the latest updates in that sector.
How to Prepare for the Hunt
If you’re ready to take advantage of these 2% deposit deals, here is your post-Eid checklist:
- Check Your Credit Score: Use an app to make sure there are no surprises.
- Gather Your Documents: Lenders will want to see 3 months of payslips and bank statements.
- Get a Decision in Principle (DIP): This shows sellers you’re serious and have the backing of a lender.
- Speak to a Broker: High-LTV products are often only available through brokers. We can see the "whole of market" to find the best fit for your specific situation.
Frequently Asked Questions (FAQs)
Q: Can I use a 2% deposit for a flat in Oldham?
Most 98% LTV products are currently restricted to houses. For flats, you’ll likely need at least a 5% deposit, but we can check the latest lender criteria for you.
Q: Are there any extra fees?
Some of these products, like Santander's 98% deal, actually come with zero product fees and even a bit of cashback to help with legal costs! However, you still need to budget for solicitors and surveys.
Q: Can I get a 98% mortgage if I'm self-employed?
Yes, but you’ll typically need at least two years of clean accounts to prove your income.
Q: Is it better to wait until I have a 5% deposit?
It depends on how fast prices are rising. If house prices rise by 3% while you’re saving that extra 3% deposit, you haven’t actually gained anything. It’s a math problem we can help you solve.
Take the First Step Today
The mortgage market is moving fast in 2026. These 2% deposit deals from The Cambridge and others are a fantastic opportunity, but they might not stay around forever.
If you’re tired of paying off someone else's mortgage and want to see if you qualify for these new low-deposit options, let's have a chat. We’ve helped plenty of people in the same boat: you can even check out some of our case studies to see how we've handled tricky situations before.
Ready to start your property hunt?
Request a free consultation with the team at Hunter Capital today. We’ll sit down (with a coffee or tea, of course), look at your numbers, and find the best way to get you those keys.
Let’s make 2026 the year you move into your first home!