A new type of ISA has become available to help First-time buyers to help them save up a deposit for their home. The government will add an extra 25% tax free to your savings.
How a Help to Buy ISA works
For every £200 you save, the government will contribute £50.
You can save up to £1,200 in your first month, then up to £200 a month after that.
You need an initial deposit of up to £1,000 which also qualifies for the 25% boost from the government.
The minimum amount you need to save to qualify for the bonus is £1,600 (which gives you a £400 bonus)
The maximum amount you can save in a Help to Buy ISA is £12,000.
Which means the most you can get from the government is £3,000,
Help to Buy ISAs are an individual product and available to each first-time buyer, so couples are treated separately. If you’re buying a property with your partner, for example, you’ll be able to get up to £6,000 towards your deposit if you are both first time buyers.
The 25% bonus will go straight to the mortgage lender.
It is your solicitor who applies for the cash bonus to be paid out when you are ready to buy a home
You only get it if you buy a home, it does not go into your account or earn interest.
- You need to be a first-time buyer.
- You must be aged 16 or over.
- It can be used to buy any home worth under £250,000 (or under £450,000 in London).
- A Help to Buy ISA can be used with any mortgage.
- You can’t use a Help to Buy ISA if you’re going to rent out the property.
- You can’t use a Help to Buy ISA on an overseas property.
- You can’t have more than one Help to Buy ISA.
- You can’t open a Help to Buy ISA and a normal Cash ISA in the same tax year.
If you’re a first time buyer considering a purchase and need advice, call us now on 0161 678 7996.