A Help To Buy ISA, not to be confused with the Help To Buy Scheme, is a savings product that is rewarded with tax-free bonuses for money that is saved towards a deposit on a new home. Aimed at first time buyers only, the government will pay a ‘bonus’ of £50 for every £200 saved.
As well as receiving tax-free interest (available on all ISA products), with the maximum government bonus of £3,000 available, this savings plan will mean a 25% boost for anyone who has never previously owned their own home. In addition, if two first-time buyers are making a purchase together, they are able to save into two separate ISAs, offering up to an extra £6,000.
The government bonus is claimed via your solicitor during the purchase of your property, so whilst the savings made in a Help To Buy ISA do not have to be used to buya house, if you decide not to proceed with a property purchase, you will not receive this additional money.
To qualify you will need to have saved at least £1,600 within your Help To Buy ISA. This will then entitle you to an initial £400 reward. The maximum property value in London eligible to be purchased using a Help To Buy ISA is £450,000, and for the rest of the country the maximum property value will be £250,000.
Further terms & conditions apply and to find out more and check if you are eligible, visit the Help to Buy website. However, we do advise that you talk to an Independent Mortgage Advisor for expert help on buying your first property.