Right to Buy mortgage explained
Right to Buy lets eligible council and some housing-association tenants buy their home at a discount on its market value. The discount depends on how long you have been a tenant and is capped, with the cap varying by area. Many lenders let the discount stand in for a cash deposit, since it is instant equity, which makes buying possible for tenants with little saved. It is a specialist lending area.
The discount is the key
The heart of Right to Buy is the discount: you buy at less than market value, which means you start with equity in the home. The size depends mainly on how long you have been a tenant, and it is subject to a cap that varies by area and changes over time, so check the current figure for your situation. Because the discount is real equity, many lenders treat it as your deposit, which is why tenants with little cash can still buy.
How the mortgage works
You apply for a mortgage on the discounted purchase price, with the discount providing the equity a deposit normally would. Not every lender offers Right to Buy mortgages, and those that do have their own rules on the discount, the property type and your income. A broker familiar with the scheme can place you with a participating lender.
Things to check first
- The repayment rule: selling within a set period can mean repaying some of the discount.
- The property condition and, for flats, the service charges and lease.
- That your income supports the mortgage on the discounted price.
- The current discount cap and eligibility rules for your area.
Common questions
What is Right to Buy?
Right to Buy is a scheme that lets eligible secure council tenants (and some housing-association tenants) buy their home at a discount on the market value. The discount depends on how long you have been a tenant and is subject to a cap, with the rules and cap varying by area and over time.
Can the discount count as my deposit?
Often yes. Many lenders accept the Right to Buy discount in place of, or towards, a cash deposit, because it represents equity from day one. This is what makes the scheme so powerful for tenants with little saved, though a lender may still want to see some of your own funds.
Which lenders offer Right to Buy mortgages?
It is a specific part of the market, not every lender participates, and they have their own rules on using the discount and on the property type. A broker who handles Right to Buy can match you to a participating lender.
Is there anything to watch out for?
Yes. If you sell within a set period after buying, you may have to repay some or all of the discount. Check the resale and repayment rules, the property's condition and any service charges (for flats) before committing.
Other lower-deposit routes: shared ownership and 95% mortgages.
Founder, MortgageExplained, MortgageExplained
Adam spent nearly a decade as a mortgage adviser at Just Mortgages, with further experience in commercial finance. He is CeMAP and CF qualified. He built MortgageExplained to do one thing well: explain mortgages in plain English, then introduce you to a regulated broker when you are ready. Every page is written and reviewed by Adam.
Last reviewed: 29 June 2026