Mortgage Calculator for Right to Buy Borrowing

Right to Buy is a popular initiative supporting tenants in social housing schemes to secure their entitlement to purchase their long-term residence. Visit our calculator for immediate access to information about what you can borrow and the associated repayment costs.

About your mortgage

Error: Yearly income income must be between £1 and £10,000,000.

Error: Regular bonus must be between £1 and £10,000,000.

Based on your yearly income, you may be able to borrow:

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Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.

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Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.

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Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.

Mortgage Calculator for Right to Buy Borrowing

Right to Buy helps council tenants purchase their home at a discounted rate, and a calculator can be a good starting point to get a rough idea about what sort of rates you might be offered, and what your Right to Buy mortgage might cost.

The best way to find the most attractive Right to Buy offers is to work with an experienced, independent broker - contact Revolution on 0330 304 3040 or email us at info@revolutionbrokers.co.uk.

What is Right to Buy, and Am I Eligible?

The government offers a significant discount on the purchase value of a council property, depending on the following:

  • Where you live (different discounts apply in London).
  • How long you have lived there - the minimum is three years.
  • If it is your only home; you cannot have an additional residence, or use Right to Buy to purchase a second property.
  • Whether there are any severe credit issues or court orders pending.

You can apply jointly with a partner, provided they are on the tenancy agreement and have been living with you for at least a year. There can be up to three family members on each application.

In England, the maximum Right to Buy discount is £80,900, or £108,000 in London.

The longer you have lived in the property, the larger the discount.

There are also rules about existing bankruptcy petitions or creditors agreements. You also cannot apply for Right to Buy if the property is due to be demolished.

Can I Get a Right to Buy Mortgage Throughout the UK?

There are different schemes in place in Wales and Northern Ireland.

In Scotland, there is no similar scheme. While you can apply to purchase a council property if they agree it will likely be at full market value.

In Wales, there is a similar scheme but with a maximum discount of £8,000. You need to have been a council tenant for at least five years, although that doesn't have to be within the same property.

Northern Ireland offers a similar scheme with a maximum £24,000 discount, again with a five-year council tenancy requirement. These discounts are not provided on ground floor properties of one or two bedrooms, or sheltered accommodation.

How Much Discount Can I Get on Right to Buy?

The upper limit is capped at £108,000 in London and £80,900 throughout the rest of England - the discount is higher in the capital, given the higher property prices.

Your discount depends on whether you are buying a house or a flat, how long you have lived there, and what the property is worth.

The below table shows the discount available on a house valued at £100,000 - you get a 35% discount if you have been a tenant for between three and five years, plus 1% more for every additional year of residency:

Length of Tenancy

Discount Available

Value of Discount

Three to five years

35%

£35,000

Six years

36%

£36,000

Seven years

37%

£37,000

Eight years

38%

£38,000

Nine years

39%

£39,000

Ten years

40%

£40,000

Discounts on flats are different, and start at 50% with an additional 2% discount for each extra year:

Length of Tenancy

Discount Available

Value of Discount

Three to five years

50%

£50,000

Six years

52%

£52,000

Seven years

54%

£54,000

Eight years

56%

£56,000

Nine years

58%

£58,000

Ten years

60%

£60,000

How Much Does it Cost to Pay Back a Right to Buy Mortgage?

If you're eligible for Right to Buy, you need to make sure you can afford the monthly mortgage repayments, as well as the general costs to run your home. Expenses include:

  • Utilities.
  • Council tax.
  • Maintenance costs.
  • Insurances (buildings, contents, life, mortgage payment protection).
  • Service charges on a leasehold property.

Mortgage calculators can be useful to work out the total cost to run and buy your home.

What Deposit is Required for a Right to Buy Mortgage?

Many Right to Buy applicants do not have a deposit - making this scheme highly attractive to applicants who would otherwise not be able to get onto the property ladder.

If you apply to the right lender, they will consider the Right to Buy discount in lieu of a deposit, so you can borrow up to 100% of the purchase value, without needing a cash deposit.

Potentially, depending on your financial circumstances and value of the home, you might be able to borrow more, and raise funds to cover property improvement costs.

Some lenders do require a deposit, and will usually ask for 5% to 10%, although this very much depends on the policies of the lender and how closely you meet their requirements.

You cannot rent out a Right to Buy property within the first five years - however, you can rent it out after five years. Usually, you'll need approval from the landlord, and sometimes to pay a subletting charge.

In most cases, you will need consent from your mortgage lender, or to refinance on a Buy to Let mortgage.

BTL lending is usually capped at a 75% LTV, requiring a 25% deposit - although you can find lenders with much lower deposit requirements by working with an independent broker.

How Do I Calculate Affordability and How Much Does That Mean I Can Borrow?

Lenders need to work out what they think you can afford, and how risky your application is. They will look at:

  • Your age.
  • Credit rating.
  • The property type.
  • How much you earn.
  • The stability of your employment.

Mortgage calculators can be useful in working out an estimate of what you might be able to borrow. However, it's worth remembering that a calculator is only ever indicative, and so it's best to consult a broker who can provide more accurate figures.

Lenders will usually offer up to four times your annual income, although some can offer five or even six times in the right circumstances.

You'll also need to provide details about your employment, how stable it is (i.e. if you have a permanent role, full-time or part-time, fixed-term contract etc.). Some lenders will include bonuses or commission in your annual salary figure, meaning you can potentially borrow a higher value.

Self-employed applicants will need to provide around three years of accounts. Again, there is flexibility available by working with an independent broker, and you can apply for Right to Buy as a self-employed person even if you haven’t been trading for long.

Can I Get a Right to Buy Mortgage with Bad Credit?

You can, although you'll need professional advice to apply to the right lenders. In some cases, you might be offered higher interest rates, or be asked for a deposit, but Revolution can negotiate the terms on your behalf.

We work with Right to Buy applicants who have had any number of credit problems, including:

  • Low credit rating, or no credit score.
  • Late payments and mortgage arrears.
  • Defaults or CCJs.
  • Debt management plans.
  • IVAs.
  • Bankruptcy or repossessions.

The best thing to do is to check your credit score before you apply, and understand what issues are shown, and how long ago they occurred.

Query any errors, and ensure your credit file is up to date before you start the mortgage application process.

What Types of Property Can I Purchase through Right to Buy?

Different properties receive different discounts. Non-standard properties can be trickier to mortgage since they pose a higher risk to the lender - these include:

  • Unusual constructions and eco-homes.
  • Listed buildings.
  • High-rise flats, and flats with balcony access.
  • Concrete properties and those with timber frames.

You can purchase these sorts of homes through Right to Buy, but it is vital to work with a broker who can recommend lenders with experience in non-standard property lending.

We often help applicants who have been rejected by their bank due to their age - many lenders set an upper limit, or might not consider pension income streams in their affordability calculations.

You can secure Right to Buy lending if you are retired, or nearing retirement age, by working with lenders who have more flexible later-life lending terms.

Give us a call if this applies to you, and we'll put you in touch with the best lenders.

Professional Advice with Right to Buy Mortgage Calculations

While online calculators are useful, they are only ever indicative, and can't assess things like eligibility criteria.

For help finding the most competitive Right to Buy lending, and working out what you could borrow and how much it will cost, give us a call on 0330 304 3040, or email the mortgage advisors team at info@revolutionbrokers.co.uk to arrange a good time to talk.

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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