- Salli Anstey
The government-backed ‘Help to Buy ISA’ offers first-time buyers the opportunity to save up to £200 a month with the government topping up their contributions by 25%, so for every £200 you save, you will receive a government bonus of £50. That’s up to £3,000 free from the Government towards a first-time buyer’s purchase! It is, however, many newcomers’ last chance to take advantage of this scheme as it closes to new applicants at the end of this month, 30th November 2019.
So, is it worth taking advantage of, is it easy to understand and what will you need to do to make sure you don’t miss out?
Do you tick all of the boxes?
Are you a first-time buyer who has never owned or part-owned a property anywhere worldwide? Are you over the age of 16? Do you have a valid national insurance number and are a UK resident? Are you yet to contribute to a cash ISA in the current tax year? If so, you are eligible. Help To Buy ISAs are individual products however, so first-time buyers are eligible for one even if they’re buying with someone who’s owned before.
How can you get one?
Help to Buy ISAs are offered by most major banks and building societies, with varying interest rates, and a first-time buyer can open one with a deposit from as little as one pound.
How does a Help To Buy ISA work?
Once you’ve opened one with your chosen deposit amount, you can add up to £200 a month into your account. To kick-start your account to its maximum, in the first month you can deposit a lump sum of £1200. For every pound you save the Government will add 25p, up to a maximum of £3,000. The 25 per cent bonus, calculated on the overall account balance including the interest, is added by the Government when you come to buy your home.
Although you have to open the account by 30 November 2019, you will be able to continue saving into your account until November 2029 and you then have until December 2030 to claim your bonus, so you can save as slowly as you like.
What’s more, couples can EACH open an account and then join them together when they’re ready to buy, giving them a maximum possible government bonus of up to £6,000.
An opportunity for parents to help their children afford a home
For many parents who want to give their children money to get on the property ladder, this is a viable option. If they are 16+, the bonus means it’s a useful place to give them money to save in.
Because you can open the facility with as little as £1, it could be worth doing if you’re thinking of buying in the next five or even ten years. Even if you haven’t started saving yet you can keep it for ten years and start saving whenever you are ready. If you change your mind, you don’t have to use the ISA for a deposit. You can withdraw cash from the account at any time. You would still get the interest, but not the bonus.
Accounts can be opened quickly and easily online with some banks and building societies. Read more about Help To Buy ISA
At Private Wealth Mortgages, we offer a FREE no-obligation consultation where we can chat through any questions you have about the scheme or how to apply. Give us a call today on 01403 270006 and one of our friendly expert mortgage advisors can talk you through the process.