What is a Help to Buy ISA?
A Help to Buy ISA is a government scheme that has been designed to help first time buyers save for a mortgage and get on the property ladder. This is a useful scheme with 81% of first-time buyers in 2017 using Help to Buy ISA’s to purchase their first property.
How does it work?
This scheme will ‘top up’ any savings you make by up to 25%. This means for every £200 you save the government will contribute £50! There is a cap of £3000 that you can gain from the scheme, this would increase the maximum of £12,000 in savings to £15,000.
Why should I get a Help to Buy ISA?
The scheme has a time limit and Help to Buy ISA’s will only be available to new savers up until the 30th of November 2019. Those who opened a Help to Buy ISA before this date will have until the 1st of December 2030 to claim their bonus. Those who are interested in this scheme should therefore apply as soon as possible or risk missing out!
Am I Eligible?
Not everyone is eligible for a Help to Buy ISA, to qualify;
- You must be a first time buyer. This means you cannot own property in the UK or anywhere else in the world;
- You must be aged 16 or over;
- You cannot use the scheme to rent property;
- You cannot use the Help to Buy scheme for overseas properties, and;
- You cannot open more than one Help to Buy ISA, but if you wish to purchase a property with someone else, such as partner, you can both open a Help to Buy ISA each as long as you are both eligible.
See more about eligibility here: https://www.helptobuy.gov.uk/help-to-buy-isa/who-is-eligible/
Is there a limit on how much I can save or receive from the scheme?
You can start off your ISA with an initial deposit of up to £1,000 which also qualifies for the scheme. The minimum amount you need to save before the scheme will pay out is £1,600 which will produce a bonus of £400. After the initial deposit you can save up to £200 a month. Therefore, if you want to qualify for the maximum bonus of £3,000 it will take just over four and a half years.
Any saving you make will only qualify for the bonus if the purchase price of the property is £250,000 or less (or £450,000 for London properties)
How can I open a Help to Buy ISA before it’s too late?
You can apply for a Help to Buy ISA through a bank or building society either online, by telephone or in a branch.
We recommend the following websites for comparing Help to Buy ISAs: