Help to Buy: ISA Launch

Following our blog in April 2015, when the government announced that a Help to Buy ISA would be available for first time buyers in Autumn this year, they are now available at many banks offering competitive interest rates as well as the government’s 25% top up to savings.

You can put in an initial £1,200 when opening the ISA and a maximum payment of £200 per month thereafter.

The best interest rates currently offered are from Halfiax who are offering 4% and Virgin Money offering 3%. Many banks do offer the Help to Buy: ISA but their interest rates are around 2%. The government will allow the 25% top up on the minimum savings of £1,600 and the maximum savings of £12,000. Below is a breakdown of the bonus received for the amount of savings:

There are some clauses that apply to opening this ISA such as it is only available for people aged over 16 intending to purchase their first property. Anyone who has owned a property previously or currently is unable to open a Help to Buy ISA.

You can also not have another personal ISA as well as this one. However, some banks are offering a shared help to buy and personal ISA. The rules will be the same as a personal ISA with the maximum savings cap.

The bonus will also only be awarded for properties under the price of £250,000 and in London £450,000 and can be used on any property, not just new builds like other schemes. The bonus will be applied for through the solicitor upon purchase of the property and there will be an administration charge from them for this. It is currently recommended to be £50+VAT (£60).

A more in depth guide and more information of banks interest rates can be found at http://www.moneysavingexpert.com/savings/help-to-buy-ISA