What Is A Help To Buy ISA?
A Help To Buy ISA is a type of ISA designed to help first-time buyers save money for their first home. To reward you for saving money, the government will pay out a 25% bonus on top of anything you save, providing that the amount you save is above £1,600 and up to £12,000. They will therefore contribute £50 for every £200 saved.
From 30th November 2019, Help To Buy ISAs will no longer be available to open as the scheme is being stopped by the government. However if you opened an ISA before the deadline, you are still able to save and will still receive your government bonus providing that you claim it before 1st December 2030.
How Does a Help To Buy ISA Work?
Depending on the bank or building society, you will be able to open an account with a deposit of up to £1,000 and then pay in up to £200 per month afterwards. You will then be able to claim your bonus before buying your first home, which can be used for your house deposit. The bonus is calculated per person as opposed to per house, meaning two people with Help To Buy ISAs can receive a bonus on their individual amounts to use for one house. To achieve the maximum £3,000 bonus, you must save £12,000, which will take just over 4.5 years to save providing you save £200 per month every month.
In order to qualify for a Help To Buy ISA, you must be a first-time buyer, be at least 16 years old and must use the ISA to buy a home worth up to £250,000 or £450,000 in London. You are also able to use the ISA with any mortgage.
To find out more about the Help To Buy ISA scheme, get in touch with us on 01392 875391.