A major high street bank has launched a new £0 deposit mortgage for Right to Buy home loans.

Barclays has scrapped its deposit requirement for people buying their council or housing association homes under the government’s Right to Buy (RTB) scheme.

Until now, the bank required at least a 5% deposit for RTB mortgages. But under the new changes, eligible buyers no longer need to put down any money up front.

Right to Buy (RTB) is a government scheme that allows those living in council houses or some housing association properties to buy their homes at a heavily discounted rate, based on how long they’ve lived there.

For example, someone who’s been a public sector tenant for three to five years can get a 35% discount, and the discount gets bigger the longer you’ve lived there.

Barclays will now use the RTB discount in place of a direct deposit. This enables eligible borrowers to access lower loan-to-value (LTV) mortgage rates, which typically come with better deals and lower interest rates. This could make repayments cheaper and reduce the overall cost of borrowing.

For example, a tenant purchasing their home with a 40% RTB discount would be treated as having made a 40% deposit, therefore qualifying them for 60% LTV rates, meaning the mortgage is based on 60% of the home’s value.