What is a Help to Buy: ISA?
What is Help to Buy?
Help to Buy schemes have been created by the Government to help individuals own their own homes.
What is an ISA?
An ISA is a tax-free account for your savings or investments.
What is a Help to Buy: ISA?
One of the Government’s Help to Buy schemes, it allows potential first-time homeowners to save money to purchase a property. The Help to Buy: ISA is available from selected banks, building societies and credit unions.
You are allowed to start off your ISA savings with a deposit of up to £1,200. After that, you can save up to £200 per month in your account.
The Government also adds a ‘bonus’ to your ISA, in proportion to the amount you’ve saved. The minimum bonus amount that you can get is £400 – you will need to have saved at least £1,600 to claim this. The maximum amount available is £3,000 – you will need to have saved £12,000 to be able to claim the bonus.
The bonus must go towards the purchase price of the property itself. It cannot be used to pay for the deposit for the exchange of contracts, for solicitor’s or estate agent’s fees, or any other indirect costs.
You can calculate the amount of government bonus that you might be able to claim here.
What is a government bonus?
Help to Buy: ISA accounts are available to each eligible buyer. They are not restricted to one per household. This means that, if you’re planning on purchasing a property with your partner, you could both open accounts and each receive a government bonus that will go towards buying your home.
Who is eligible for a Help to Buy: ISA?
To qualify for a Help to Buy: ISA, you need to:
- Be at least 16 years old
- Have a valid National Insurance (NI) number
- Be a UK resident
- Be buying a property for the first time, anywhere in the world
- Not have another active cash ISA in the same tax year
Does your property qualify for a government bonus?
To qualify for a government bonus on your Help to Buy: ISA, the property that you are planning on purchasing must be:
- In the UK
- Up to £250,000 (£450,000 in London)
- The only home you own
- The property that you will live in
- Purchased with a mortgage
Is your credit report in good shape?
Having a good credit report and score will help improve your chances of getting the best mortgage deal for you. It may be useful for you to get a hold of your Equifax Credit Report & Score before you apply for a mortgage. Your credit report will show problem areas that may need your attention, while your credit score will give you an idea of how lenders may view your creditworthiness.
- Saving for a mortgage deposit
- What is a mortgage interview?
- How do credit scores affect mortgages?
- What to consider when applying for a mortgage if you’re self-employed
- Buying property – what is conveyancing?
- Buying a property – what is gazumping?
- Types of home improvement loans
- What happens to a mortgage after death?
- Getting credit-ready before applying for a mortgage
- How do mortgage applications work?
- Selling property – what to ask estate agents
- Selling property – estate agents vs doing it yourself
- Buying a leasehold property
- Help to Buy: equity loan
- London Help to Buy
- Mortgages for self build and custom build homes
- Help to Buy: Shared Ownership
- Resources for first-time buyers
- Buy-to-let mortgages explained
- What is remortgaging?
- How mortgage repayments work
- Understanding Mortgages
- Types of Mortgages
- Mortgage rates & decision
- Homebuyer's guide