With less than 30 days left to open a Help to Buy ISA, experts are encouraging those whom would wish to buy their own home in the future to open one today even if its just with £1 in. 

What is a Help to Buy ISA?

A Help to Buy ISA is a government scheme designed to help you save for a mortgage deposit to buy a home. To qualify you must be classified as a first-time buyer and not own a property anywhere in the world.

Savings are tax-free just like with any ISA product, however, a Help to Buy ISA gives you the added bonus of getting government contributions.

How do Help to Buy ISAs work?

The government will top up any contributions you make by 25%, up to the contribution limit of £12,000. So, for every £200 you save, the government will contribute £50. This means you can earn a maximum of £3,000 from the government.

The minimum amount you need to save to qualify for a government bonus is £1,600 (which gives you a £400 bonus).

You can start off your ISA with an initial deposit of up to £1,000 which also qualifies for the 25% boost from the government.

Help to Buy ISAs are available to each first-time buyer, not each home. So, if you’re buying a property with your partner, for example, you’ll be able to get up to £6,000 towards your deposit.

When your solicitor or conveyancer should apply

Instruct your solicitor or conveyancer to apply for your government bonus once your offer has been accepted. Don’t wait until completion as this will be too late.

Once they receive the government bonus, it will be added to the money you’re putting towards your first home.

Will my bonus contribute towards the deposit to buy my home?

Yes, the government bonus will be added towards your overall deposit.

When calculating your mortgage, your lender will want evidence of the funds you have available. This will include the amount saved into your Help to Buy ISA. Your lender will then include the amount of your government bonus when working out your mortgage loan amount.

Who qualifies?

 You need to be a first-time buyer.

 You must be aged 16 or over.

 You can use it to buy any home worth up to £250,000 (or up to £450,000 in London).

 You can use a Help to Buy ISA with any mortgage; you’re not restricted to a Help to Buy 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*.

How long are Help to Buy ISAs available?

Help to Buy ISAs are available until 30 November 2019.

They won’t be available to new savers after this date, but if you opened your Help to Buy ISA before then you can keep saving into your account.

You must claim your bonus by 1 December 2030.