Help to Buy ISA - extra information
The money must be used towards buying a property. Many first-time buyers are turning to the Help to Buy ISA in order to get on the property ladder so we've taken a closer look at the Help to Buy ISA starting with some of its pros and cons.
The pros of Help to Buy ISA
It's available for all types of property not just new houses
You can use the savings for any type of mortgage not only a Help to Buy mortgage
You can combine it with other government initiatives such as the Help to Buy Equity Loan
If you're buying as a couple, each person can apply for a separate account
The cons of Help to Buy ISA
You must be a first-time buyer either inside or outside the UK
You can only have one ISA active at any time
You'll lose your bonus if you withdraw your money early
You can't rent out the property you're buying
What are the starting dates?
Help to Buy ISAs were introduced in December 2015 and are available until 30 November 2019. You can continue paying into the scheme after that date but the bonus must be claimed by 1 December 2030.
What's the limit I can save each month?
You can save £1,200 in the first month (£1000 to get the account started plus £200) then £200 a month after that. You don't have to save the maximum £200 a month, only what you can afford. You can miss a month although you still can't put in more than £200 for any month afterwards. You need to save £1,600 before you can claim an initial minimum bonus of £400.
What banks operate a Help to Buy ISA account?
Banks involved with Help ISAs include NatWest, Virgin Money, Barclays, Nationwide, Lloyds Banking Group and Santander. If you want to, you can switch your account to another provider at any time.
How to maximise your returns
In order to receive the maximum bonus of £3000, home buyers need to save £12,000. This would be a result of savers putting in the maximum £200 per month over five years.
What happens if I don't use the money to buy a house?
You would lose the bonus just as if you took the money out early.
Click here for more information on Help to Buy Mortgages