How a Right to Buy mortgage works

A Right to Buy mortgage is an ordinary residential mortgage used to buy a public sector home at a discount. What makes it different is the deposit. Lenders that take part in the scheme accept your Right to Buy discount in place of a cash deposit, which is why most tenants can buy without savings of their own.

The lender values the property at its full open market value and lends against the discounted purchase price. If your home is valued at £180,000 and your discount is £30,000, you buy at £150,000 and that £30,000 counts as your equity from day one. You can check the figure you are likely to qualify for with our Right to Buy discount calculator.

What lenders assess

Not every lender offers Right to Buy mortgages. Some advertise the product openly, others assess each case on its merits, and a few will not lend on discounted purchases at all. Where a lender does take part, the assessment covers the same ground as any residential application:

• Affordability, based on your income and your existing credit commitments
• Your credit history, including any defaults, CCJs, a debt management plan or an IVA
• The property itself, including construction type and, for a flat, the length of the lease and the level of service charges
• Whether the price agreed with your landlord matches the lender’s own valuation

Our Right to Buy mortgage calculator gives you an indicative borrowing figure before you speak to anyone.

Borrowing more than the purchase price

Some Right to Buy lenders will lend above the discounted price so you can carry out improvements, such as replacing a kitchen or bathroom. How much is available depends on the open market valuation and the lender’s own loan to value limits, so it is worth establishing this before you commit to the purchase rather than after.

Right to Buy with adverse credit

A poor credit history does not rule you out. The choice of lender narrows and the rate you are offered is likely to be higher, but there are lenders that will consider defaults, CCJs, an active debt management plan or a discharged IVA on a Right to Buy purchase. What matters most is how recent the issue is, how much it was for, and whether it has been satisfied.

Your Section 125 notice sets the clock running

Once you apply to your landlord and your eligibility is confirmed, you receive a Section 125 notice. This sets out the price, how your discount was calculated, any known structural problems and, for a flat or maisonette, estimated service charges for the first five years. You then have 12 weeks to confirm that you intend to proceed. If you believe the valuation is too high, you can request an independent valuation from a District Valuer within three months of the offer.

Going direct to a lender, or using a broker

A lender can only tell you about its own products. That may well be the right deal, but you have no way of knowing without comparing it against the rest of the market. We work with over 90 lenders, including smaller specialist names that do not deal with the public directly, and we will tell you where you stand before you commit. For a fuller explanation of the scheme itself, read our guide to Right to Buy mortgages.

Last reviewed 14 August 2026. Right to Buy applies to England. A similar scheme operates in Northern Ireland under different rules, and the scheme is closed to new applicants in Scotland and Wales.