Get a helping hand onto the property ladder with a Help to Buy: ISA.
When you use the funds in the Help to Buy: ISA to buy your first home, the Government will give you a 25% bonus on savings of up to £12,000.
This means you could have as much as £3,000 extra to put towards your first home!
To find out more about the Help to Buy: ISA, read the FAQs below:
To open a Help to Buy: ISA you must:
- Be 16 or over
- Have a valid National Insurance number
- Be a UK resident
- Have never owned a property or a share in a property anywhere in the world
- Not have another active cash ISA in the same tax year - if you have opened a cash ISA this tax year, you can open a Help to Buy: ISA but will have to take additional steps as explained below.
Please note that you can only have one Help to Buy: ISA, although you can transfer between providers.
You cannot hold investments in a Cash ISA and a Help to Buy: ISA in the same tax year, however it is possible to transfer current tax year Cash ISA investments up to £1,200 into a Help to Buy: ISA. Any investments over this amount which have already made in this tax year can be moved into another type of ISA or another non-ISA savings account. You must not exceed the annual subscription limit for ISAs.
Within the first calendar month you can deposit £1,200 in your Help to Buy: ISA.
After that, you can deposit a maximum of £200 per month.
Please note that the 25% Government bonus is only paid up to £12,000 of savings.
Yes – with most lenders, including us, the Help to Buy: ISA is an instant access account, meaning you can withdraw money as and when needed.
While there are no limits on withdrawals, it’s important to remember that you can only deposit a maximum of £200 per month.
So, while you can withdraw £1,000 in just minutes, it will take you at least 5 months to replace it.
November 30th 2019 is the last day you can open a Help to Buy: ISA, so you’ll have to act soon if you want one.
The deadline to claim your Help to Buy: ISA bonus is December 1st 2030.
The Help to Buy: ISA is an individual product, so you can’t have a joint one.
However, if you are buying a home with another person, you can both open a Help to Buy: ISA and claim the separate bonuses to combine for the house purchase (as long as you’re both buying your first home).
If you’re a first-time buyer but you’re buying with someone who has owned a home before, then they can’t have a Help to Buy: ISA, but you still can.
If you’re looking to buy a property, a Help to Buy: ISA might be a good way to boost your savings.
If you’re not looking to buy right now, but may do in the future, it could still be worth investing in a Help to Buy: ISA if there’s a chance you’ll buy your first home before the scheme ends in 2030.
Our Help to Buy: ISA is an instant access account - you are free to withdraw cash whenever you want. So, if you don’t end up buying it’s easy to withdraw anything you’ve saved.
It’s also important to note that Help to Buy: ISA bonuses are only paid on properties up to £250,000 (or £450,000 in London). If your property costs more than this, you can still use your Help to Buy: ISA savings, but you won’t get a bonus.
To get the bonus, you will contact your account provider and request the closure of your ISA when you are ready to buy.
The bonus will be calculated on the closing balance of the account.
Your account provider should give you a closing letter, which your solicitor will use to claim the bonus on your behalf. This claim is made between the exchange of contracts stage and the completion stage.
The bonus is paid upon completion, which is when you get the keys to your new home and it is officially yours.
We understand there’s been some confusion around this, so we’ll do our best to clear things up.
Many people don’t realise that there are actually TWO deposits to be made when buying a house – the home exchange deposit and the mortgage deposit.
Because of when it’s paid, the Help to Buy bonus CANNOT be used for your home exchange deposit, but it CAN be used for your mortgage deposit.
The Home Exchange Deposit
The first deposit you need to pay is the home exchange deposit.
This is paid at the exchange of contracts stage in order to secure the property.
The home exchange deposit is usually around 5-10% of the property value, though this can vary.
You can use the savings in your Help to Buy: ISA towards this deposit, but you cannot use the bonus - because you won’t have received it yet.
The Help to Buy: ISA bonus is paid later in the house buying process, at the completion stage.
The Mortgage Deposit
The mortgage deposit is all the money and savings that you are contributing upfront towards buying a house (including the home exchange deposit) that isn’t part of the mortgage loan from a mortgage provider.
The mortgage deposit is paid on completion. This is also when you receive your Help to Buy: ISA bonus, so you will be able to use the bonus to increase your savings and put towards this deposit.
Let’s say you are buying a house that costs £100,000.
You have £10,000 of savings in your Help to Buy: ISA, which will give you a £2,500 bonus.
At the exchange of contracts stage, you will use your £10,000 savings for a 10% home exchange deposit.
Later, at the completion stage, you will receive your £2,500 Help to Buy bonus, which can also be put towards purchasing the property.
This means that, in total, you have put £12,500 towards buying the property - this is your mortgage deposit.
The remaining £87,500 needed to purchase the property will be borrowed from a mortgage lender.
To qualify for a bonus, you need to save a minimum of £1,600, which would give you a £400 bonus.
With a Help to Buy: ISA, you can deposit up to £1,200 in the first month of opening the account. After that, you can deposit a maximum of £200 each calendar month.
Therefore, if you deposit the maximum amount possible every month you will be eligible for a bonus in the third calendar month of having the account.
To receive the maximum bonus of £3,000, you would need to save £12,000. This would take 4 years and 7 months if you were to deposit the maximum amount every month.
Of course, you don’t have to put in the maximum each month if you’re happy to build your bonus more slowly.
You are able to open our Help to Buy: ISA with as little as £1, and can skip as many monthly payments as you want.
However, you can’t make up for any months that you missed investing the £200 maximum – the allowance doesn’t roll forward if you don’t manage to reach it.
You can combine your Help to Buy: ISA savings (and bonus) with other funds to make up your house deposit, so if you want to save more than £200 a month you can invest the extra savings into another type of account.