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What’s a Help to Buy ISA?

As you might guess from the name, these ISAs are designed to help you buy something – in this case, your first home. If you’ve ever bought a home at any time, you’re not eligible for this product, even if you’ve sold your property and live in rented accommodation now.

If you’re thinking about setting out on the road to home-ownership,  a Help to Buy ISA can be a handy way to save because the Government will add 25% to your stash on top of any interest earned, provided you use it as a mortgage deposit (cash-buyers won’t get the bonus part, although you can still open one) and you’ve saved a minimum of £1,600.

The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.

How it works

You can save £1,200 in your first month and £200 maximum every month after that. But if you don’t save the full amount, you can’t put extra in the following month to make up for it. There’s no limit to the amount you can save either, but the 25% is only payable up to £12,000.

Couples saving up for a home can both take one out too, so you could save £24,000 between you and get an extra £6,000. Remember though, if one of you has previously been a homeowner, they can’t open a Help to Buy ISA.

If you take any of the funds out and don’t use them as a deposit, you’ll lose the bonus on that amount. The remaining amount will still be eligible, including any you put in after the withdrawal.

Things to think about

  • Help to Buy ISAs can be used on homes worth up to £250,000 or £450,000 in London.
  • You’ll need to get a solicitor to do the online application for the bonus. They might charge for this.
  • You can combine your savings amount with any other money you’ve saved, but you won’t get the bonus on this part.
  • Unlike other ISAs, you can’t open more than one, ever. You can, however, move providers.
  • You can only open one up until December 2019 and all bonuses must be paid by December 2030.
  • There’s no guarantee a new government would honour the bonus amounts.

If you’d like to know more about investing in a Help to Buy ISA, get in touch using the form on the right-hand side of this page. We’ll get back to you as soon as we can.

You can always call us on 01244 47010 or email:  if you prefer.

Amy Smith

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