The Help-to-Buy ISA is designed for those buying their first home. It is a cash savings scheme, where the government will boost your savings by 25% when you complete the deal. (This is capped before you get too excited….)
How much can you put in every year?
You can save up to £1,200 in the first month, and then £200 per month, up to a total of £12,000. The Government will stick in £1 for every £4 you save.
It can only be invested in a first home worth up to £250,000, or £450,000 in London. And you can’t cheat, no! No house purchase, no bonus – the solicitors stand in the middle so no fiddly business allowed. If you are in a couple and only one of you is a first-time buyer, then only you can save into this.
Where can you invest?
Help-to-Buy ISAs are a cash savings product only so no stock market options are available.
What are the benefits?
They have all the benefits of a normal ISA in that any interest is tax-free, but the government top-up is an additional bonus for savers. However, they are only available to first-time buyers – your solicitor or conveyancer has to apply for the government bonus, when they will add it to the money for your first home.
Who might it suit?
It is for anyone over 16, who is saving to buy a first home. It is possible to open one up to December 2019 and it will still be possible to get the bonus for a deposit until 2030. The definition of first-time buyer is strict – it is someone who has never owned an interest in a property, either in or outside of the UK. They are an individual product, so two first time buyers purchasing a house together can save up to £24,000 this way.
Where can you get one?
Most of the banks now offer help to buy ISAs, with varying rates of interest.
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