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Is it worth me opening a Help to Buy ISA?

06 November

Is it worth me opening a Help to Buy ISA?

Yes! If buying your first home is anywhere on the horizon and you are eligible for one, it is a no brainer to start saving some money in a Help to Buy ISA.

The Government will boost whatever you save by 25% - so for every £1000 you save, you will receive a Government bonus of £250.

To be eligible, you must be 16 or over, have a valid National Insurance number, be a UK resident, and not have another active cash ISA in the same tax year. The property that you are buying must have a purchase price of up to £250,000 (or up to £450,000 in London), be purchased with a mortgage, and be where you intend to live. You must be a first time buyer – this means you don’t own and have never owned an interest in a residential property, inside or outside the UK, whether it was bought or inherited.

When should I open a Help to Buy ISA?

You can only open a Help to Buy ISA until midnight on 30th November 2019. So the time to act is now! After this date, you will not be able to open a Help to Buy ISA and will miss out on the bonus.

I haven’t got any savings yet to put into a Help to Buy ISA. Should I still open one?

Yes! Even if you aren’t able to deposit a chunk into the account right now, it is still worth opening one right now and putting even £1 in. This means that if you are able to save in the future, you still have access to gaining the Government bonus.

How does a Help To Buy ISA work?

The maximum Government bonus you can receive is £3,000 (which would mean you having saved £12,000).

The minimum Government bonus you can receive is £400, so you need to have saved at least £1,600 into your ISA before you can claim the bonus.

How much can I deposit in my Help to Buy ISA?

You can deposit up to £200 per month into your Help to Buy ISA. However, in the first month, you are able to deposit a lump sum of up to £1,200!

If you aren’t able to save one month, you don’t have to deposit anything.

My partner and I want to save to buy our first home. Can we both open a Help to Buy ISA?

Help to Buy ISAs are open to each first time buyer. So if you intend to buy a property with someone else, you should both open an account. This means you could receive a Government bonus of up to £6,000 towards your first property.

When do I receive the bonus from my Help to Buy ISA?

This is where we come in! When you are buying your first home, you will need to instruct your solicitor/conveyancer to apply for your Government bonus. You will simply need to close your ISA account and obtain a closing statement, provide us with this, and we will do the rest! We will add the bonus to the money that you are putting towards your first home.

The bonus can’t be used for the deposit due at exchange of contracts, or to pay with indirect costs associated with buying a property such as our fees or estate agent’s fees.

Even if you are only able to save a small amount per month, it is worth opening a Help to Buy ISA NOW before the end of the month when it is too late!