Saving for your first home is tough, but the government’s ‘Help To Buy ISA’ scheme aims to make it easier for individuals trying to get on the property ladder.

If you’re aiming to buy your first home and are putting money away for this reason, the ISA and the government will boost your savings by 25%. Can’t argue with that, right? Here’s all you need to know about this scheme, and how you can use it advantageously when saving for your first property.

What Is a Help to Buy ISA?

The Help To Buy ISA does what it says on the tin, it’ll help you to buy your first home. If you follow the rules stated by the provider, the government will add to your savings with a bonus of 25%.

So, for every £200 you save, you’ll receive a government bonus of £50 for example. The maximum government bonus you can receive is £3,000. So you’d need to have added £12,000 to your ISA to claim this.

The perk is available to each first-time buyer too, not each household. Meaning that if you are planning to buy with your partner, and neither of you has owned a home before – you’ll both be able to open your own Help To Buy ISA. You’ll be eligible for a collective government bonus of up to £6,000 if both of you have saved £12,000 each in your accounts.

What Options Are There?

The Help To Buy ISA is available from a range of banks, building societies and credit unions. They currently include:

  • Aldermore
  • Bank of Scotland
  • Barclays
  • Buckinghamshire Building Society
  • Chelsea Building Society
  • Chorley Building Society
  • Clydesdale Bank
  • Cumberland Building Society
  • Darlington Building Society
  • Halifax
  • HSBC
  • Lloyds
  • Monmouthshire Building Society
  • Nationwide
  • NatWest
  • Penrith Building Society
  • Progressive Building Society
  • Newcastle Building Society
  • Nottingham Building Society
  • Santander
  • Tipton & Coseley
  • Ulster Bank
  • Vernon Building Society
  • Virgin Money
  • West Bromwich Building Society
  • Yorkshire Bank
  • Yorkshire Building Society

How Do You Open A Help To Buy ISA?

It’s best to speak to your chosen provider directly about opening your Help To Buy ISA, as they’ll need to check your eligibility and then will be able to assist you in setting up the account.

How Much Do You Need To Deposit In Your ISA?

You can add up to £200 a month into your Help To Buy ISA. When opening the account you can deposit a lump sum of up to £1,200 if you are sitting on savings already that you want to add.

How Do You Claim Your Bonus?

The minimum government bonus you can be offered is £400, meaning that you need to have saved at least £1,600 in your Help To Buy ISA before you can claim and withdraw your bonus. As mentioned above, the maximum government addition you can receive is £3,000, so you’ll have to save £12,000 up before you can claim this.

When you are close to buying your first home, you will need to instruct a solicitor or conveyancer to apply for your government bonus. Once they receive the government bonus – it will be added to the money you are putting towards the cost of your first home.

It’s worth noting that the bonus cannot be used for the deposit for the exchanging of contracts, to pay for a solicitor or estate agent’s fees or for any other indirect costs associated with buying a home.

Am I Eligible For A Help To Buy ISA?

According to the government website, to apply for a Help To Buy ISA, you must…

  • be 16 or over
  • Have a valid National Insurance number
  • Be a UK resident
  • Be a first-time home buyer, and not have interest in, inherited or own property in the UK or anywhere else in the world
  • Not have another active cash ISA in the same tax year

Also, the property you plan to buy must adhere to the following rules to be eligible for the government bonus…

  • Be in the UK
  • Have a purchase price of up to £250,000 (or up to £450,000 in London)
  • Be the only home you will own
  • Be where you intend on living
  • Be purchased with a mortgage

What are the time limits the Help to Buy ISA?

The deadline to open a Help To Buy ISA was 30th November 2019, and you will be able to save for your home in it for 10 years until 30 November 2029. In order to get the bonus, you need to use it for a deposit by 1st December 2030, so if you have any plans of purchasing your own home in the next few years, don’t hesitate and open an account before it’s too late!

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