If you have been a council tenant, and have been living in your property for at least two years, you may have the right to buy your council-owned home at a discount. The right to buy scheme was set up to encourage long-term council tenants to stay in the area, and help you to get onto the property ladder. A right to buy mortgage is an agreement with a mortgage lender to borrow a percentage of the property value, after the discount has been applied. In order for your right to buy mortgage application to be approved, you need to show that you are financially secure, with sufficient income to make the mortgage repayments (or interest payments, depending on the type of right to buy mortgage you choose).
The right to buy discount you would receive would depend on the length of time you have been a tenant, and the discount is currently capped at between £16,000 and £38,000 depending on where in the country you live. The right to buy mortgage lender will use the open market valuation for your property when considering your mortgage application. You should bear in mind that if you sold the property within five years of buying it, you may have to return some or all of the discount you received on the purchase. For full details of the terms and conditions set for right to buy mortgage deals, and to find a great rate on a right to buy mortgage, fill out the short form below and SimplyFinance will connect you with a qualified advisor from our network.
Right to Buy Mortgage Basics
- A right to buy mortgage is only for those who are interested in buying their council house. There are qualifiers for this type of mortgage, such as how long the tenant has lived there, etc.
- Right to buy mortgages work in conjunction with right to buy schemes that provide council house tenants with discounts on their homes according to how long they've lived at the specific address.
- Right to buy borrowers will receive a discounted price on their council house, but their interest rate will still depend on factors like credit history, the amount of loan, and the term of the loan.
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