The Help to Buy ISA helps first-time buyers save for a property purchase. With the government automatically adding a 25% bonus to your savings, you can get up to £3,000 for free.
Save with the Help to Buy ISA and get up to £3,000 for free
Saving for a deposit on a house isn’t easy. When you factor in your rent, utility bills, living expenses and all the rest of it, there are some months where there’s very little left for savings. That can leave your pot growing at a snail’s pace.
Here to help is the government’s Help to Buy ISA. It helps first time buyers save for a deposit faster, with the government automatically adding 25% to your savings as a free bonus. Effectively that means you get a free £50 for every £200 you save.
Here’s everything you need to know about the Help to Buy ISA.
Are you eligible for a Help to Buy ISA?
The Help to Buy ISA is a scheme for first-time buyers in the UK aged sixteen or over. You cannot open an account if you already own property. You can only have one Help to Buy ISA and you cannot open a Help to Buy ISA and a standard Cash ISA in the same tax year.
How does it work?
Save in a Help to Buy ISA and the government will add a 25% bonus to your savings when you buy your first property. Your first payment into your ISA can be up to £1,200. After that you can save up to £200 each month. Once you have £1,600 in your account you qualify for the government bonus.
When you buy your property, your solicitor or conveyancer will apply for the extra 25% from the government, which will be put towards the cost of your purchase and used to help calculate your mortgage. You can earn up to £3,000 as a bonus from the government. For that you need to save £12,000, which will take around four and a half years with the £200 maximum monthly contribution. Of course, you don’t have to wait. If you find the right property, you can cash in your Help to Buy ISA anytime.
The government bonus is essentially free money, not a loan. What’s more you can use the money from your Help to Buy ISA with any type of mortgage product as well as a Help to Buy equity loan. In fact combining a Help to Buy ISA with a Help to Buy loan is an incredibly efficient way to buy your first home.
>> Read more about the Help to Buy equity loan
ISAs are available to each buyer, not each household…
The Help to Buy ISA comes into its own if you are buying property with a partner. That’s because the ISAs are available for each first-time buyer, rather than each household. By pooling your ISA resources, you can enjoy a free bonus of up to £6,000.
What sort of place can you buy?
You can buy any UK residential property up to a value of £250,000 (£450,000 in London). The property must be your first home and you have to live in it, rather than using it as a buy-to-let investment.
How do you apply?
You can open a Help to Buy ISA with a wide range of banks, building societies and credit unions – including most of the high street names you are familiar with. Here at Belvoir estate agency Peterborough we have years of experience of assisting first-time buyers who have utilised affordable home ownership schemes. We can help you use your Help to Buy ISA to find your ideal first home. If you live in Peterborough and would like to discuss your options, please feel free to contact me directly. Don’t worry, there’s no charge for an informal chat.
Lottie Hostead
Sales Manager
Lottie.hostead@belvoir.co.uk
01733 511099
This blog is written by Lottie, Lottie Hostead is Belvoir Estate Agent Peterborough’s Property Sales Manager. Born and raised here she is both a property expert with 10 years experience selling homes in Peterborough and a genuine local. If you’re thinking of selling your home here then give her a call for a free no-obligation valuation.
