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Right to buy calculator

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Oct 29, 2022

Right To Buy calculator – Calculate your mortgage repayments to buy your council house

Tenants living in council or housing association houses might be able to buy a home for less than its market rate via the Right To Buy scheme. The scheme has been active since 1980 and remains in operation despite a few amendments.

The Right To Buy maximum discount you could receive on mortgage prices is £116,200 in London boroughs, £87,200 for the rest of England, and £24,000 in Northern Ireland.

One of the stipulations is that if you sell the property within five years of purchasing it, you’ll have to pay back the total discount you received when buying it, plus a share of any profit.

Use the below right to buy mortgage calculator to get indicative rates:

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The Right To Buy Calculator

There are many accessible Right To Buy calculator web pages available. The Right To Buy discount calculator helps potential buyers estimate the Right To Buy discounts they could receive after applying to buy a council or housing association property through the Right To Buy scheme.

For this article, we’ll use the HM Government’s Own Your Home Right To Buy discount calculator as an example. We’ll use a public sector tenant, with a seven-year occupancy, in an estimated £48,000 Bristol City Council terraced council house for input data.

Start by inserting the years you’ve been a council or housing association tenant. Then enter the property type; there are four options: terraced, semi-detached, detached, and flat-maisonette. Next, fill in your postal code and estimate the approximate value of your rented property.

Once you’ve entered all the data, click on ‘Calculate.’ As stated in the image above, the market value will be approximate until you receive a formal valuation from your landlord. The actual Right To Buy discount figure you could receive may vary considerably from any estimated value indicated by the discount calculator.

The Right To Buy discount calculator will calculate according to your input, and a result screen will appear.

According to the discount calculator, from the data entered, the Bristol public sector tenant’s terraced council house could result in a 37% discount. The total Right To Buy discount would amount to £17,760 of the estimated property purchase price of £48,000.


This specific government calculator only applies to residents living in England, but numerous others are available for those living in other parts of the UK and Northern Ireland. We again stress that the result displayed for a property through the discount calculator is only ever an estimate pending an official evaluation from the landlord concerned.

The Right To Buy discount value does give you, as a public sector tenant, some idea of the discount you could expect through the Right To Buy scheme if you qualify.

In turn, you will have a clearer idea of what you’ll need to pay for a house or flat through the scheme and whether it will be affordable. Based on these estimates, you could investigate savings or mortgage loan options as the Right To Buy tenant.

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Who can apply for the Right To Buy mortgage?

All council house or housing association tenants who’ve rented their property for at least three years (amended from five years) can apply, as long as the property is self-contained and will be your main home. To qualify, your rented property’s landlord must be a council or housing association, NHS trust, or another public sector landlord.

You can apply for a Right To Buy mortgage with somebody else as long as they share tenancy with you. If you co-habit your accommodation with other family members and you’ve lived together on the premises for a minimum of one preceding year before your application, up to three members can share your Right To Buy application.

Even if the council sold your house or flat to another landlord in the public sector while you lived there, you could still apply to buy it under the prescribed “Preserved Right to Buy” clause.

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When shouldn’t you apply for the Right To Buy mortgage?

Any Right To Buy mortgage application will not be successful if you’re being evicted or even threatened with eviction. If there’s a general housing shortage, or you’re renting a current property type reserved for the aged or disabled, it would be pointless to go through the application process.


How do you start the Right To Buy application procedure?

As a public sector tenant, begin by requesting a Right To Buy application form from your landlord. Once you’ve submitted the form, your landlord has four weeks to respond. If your landlord declines your Right To Buy offer, it is necessary to give a reason for declining.

If the response is in agreement, a purchase price should accompany it.


How do you decide on a buying price?

It is up to your landlord to decide on a price and inform you of how discounts work. The price should accompany a description of the property and any information about known structural damage or other issues.

If there are any restrictions relating to who you sell the property to later, the landlord should provide this information as it could affect your ability to secure a mortgage. If you’re unhappy with the quoted price, you are within your rights to request an independent valuation through HM Revenue and Customs’ Valuation Office Agency.

After receiving the price and related information from your landlord, you have 12 weeks to decide whether or not to buy the property through the Right To Buy scheme. You, as the tenant, are allowed to change your mind, withdraw from negotiations, and continue renting the property at any point in the process.

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How do you raise the money to buy the property?

Most people require a mortgage when buying property. Even before receiving the requested purchase amount for the property, it makes sense to investigate your options and establish how affordable your potential investment would be. Now would be the right time to use a Right To Buy discount calculator to assist you.

Property market prices can vary, so testing a range of estimated prices will give you a fair idea of how much Right To Buy discount you can expect, including the maximum value you could receive. From the calculation, you would be more precise on what kind of mortgage figure you need to apply for the house or flat you plan on buying.

Mortgages can be complicated, and contacting an established lender like Loan Corp for advice and a quotation makes sense if you’re unsure how to proceed.

Should you choose to apply through Loan Corp, for example, our expert advisors would assess your application in several ways:

Affordability assessment

If you ask, we cannot tell you immediately what salary you need to secure a mortgage with us. We must assess your annual income and expenses to determine what monthly payment you can afford and a reasonable interest rate.

Loan Corp would consider what you could afford for a monthly mortgage if your lifestyle changed. We will also consider circumstances such as employment retrenchment or redundancy, disability or ill health, or a birth in your family.

Should we feel that you cannot afford any prescribed mortgage amount, we would place a cap on the amount you would be permitted to borrow.

Calculating the income you’d need for a mortgage

Lenders usually use a basic income multiplier to calculate mortgage amounts, and these multipliers differ depending on the lender’s generosity. Typically, a lender will use income that is more than four times your salary, but this could rise to as much as six times.

If you’re a couple with a dual income, applying for a joint mortgage might be an option, as you can secure a more significant mortgage amount using your combined earnings. Whatever the case, we’d encourage you to contact Loan Corp, where one of our advisors will advise you and do calculations based on your choices.

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What Loan Corp Would require

When looking at your income, we’ll consider your primary salary, pension and investment income, child and ex-spousal maintenance, commissions, overtime payments, bonuses, and work-from-home payments.

We will need copies of your bank statements and payslips if you’re employed. If you’re self-employed, you must provide copies of personal and business bank statements and your income tax payments.

Debt-to-income ratio (DTI)

Mortgage lenders will use your debt-to-income or DTI to determine if the mortgage product you want is viable.

What debt do we count?

We consider recurring debt payments for student loans, credit cards, personal loans, car finance, and rent payments, and we examine outstanding managed debt. Clearing this debt could be beneficial to an application.

Loan Corp also considers your debt circumstances and the types and number of credit cards and loans you have.

We are more open to applicants showing that debts have been settled or consistently decreasing.

What is a good DTI ratio for a mortgage?

The lower your ratio, the more likely you’ll secure a mortgage loan. Most lenders see 20-30% DTI ratios as low risk and generally afford borrowers better interest rates. To qualify for a mortgage loan, attempt to reduce your DTI ratio if it exceeds 50%.

For first-time buyers, you can determine your DTI ratio using our calculator.

Credit Rating

Like every other lender, Loan Corp will use a major independent credit reference agency, like TransUnion, Experian, and Equifax, to check an applicant’s credit rating. Although these checks aren’t necessarily defining factors when accepting or rejecting a potential borrower’s application, they carry a lot of weight.

What can you do to improve your credit rating?

To improve your credit rating, contact one of the reference agencies mentioned above and request a credit history record. It will carry no cost and will not affect your rating.

Examine the entries on your credit history to make sure any problem areas are legitimate. If you find any erroneous entries, contact the listed company and get the error rectified.

Register on the electoral roll. Lenders will be happier that you are who you say you are.

Assess the accounts you hold. If there are long-dormant accounts with minor transactional activity, consider closing them. Sometimes it’s better to have less visible credit but more active credit.

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A Right To Buy discount calculator provides more than only discount

Using a Right To Buy discount calculator can gather much more information than only an estimated discount figure. You’re able to begin planning the mortgage application process based on the statistics it provides you.

You can get a decent idea of the maximum discount, and you’ll be able to ascertain whether you can afford a mortgage loan based on the figures. This knowledge will allow you to start remedying potential pitfalls to provide lenders with a more promising application.

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I live in Northern Ireland. Can I still apply for Right To Buy in 2022?

Unfortunately, for Northern Ireland tenants, applications for 2022 Right To Buy mortgages closed on 28 August 2022.

How can I work out whether I can afford a mortgage?

With the estimated Right To Buy discount figures you obtain through a discount calculator, you can start to calculate whether you’re in a position to afford a mortgage.

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