A helping hand with Help to Buy ISAs
Saving for your first home can seem like a daunting task, especially if you’re starting your savings from scratch. Luckily, help is at hand from government schemes such as Help to Buy ISAs. However, when organising major finances for the first time in life, this can seem a little confusing. That’s why we’ve rounded up the key information you need to know about Help to Buy ISAs below, bringing your aspirations of owning your house much closer to home.
What is a Help to Buy ISA?
A Help to Buy ISA is a government scheme for first time buyers, offering a boost on the money saved for taking the first step onto the property ladder. Put simply, for every £1 you save the government will give you a further 25p and will match that up to a maximum of £200 each month and up to a grand total of £12,000. So when you save £12,000 of your own money, you’ll actually have £15,000 in the bank to use towards property finances.
Am I eligible to open a Help to Buy ISA?
Yes – so long as you’re a first time buyer aged 16 or over with a bank or building society account. It’s also possible to open a Help to Buy ISA if you’re purchasing a home with someone who isn’t a first time buyer, although they themselves can’t open one. Similar to that of Oriel’s, the motivation behind the ISAs are to support people who want to ‘buy to live’, not ‘buy to let’ – so property tycoons need not apply.
There are no rules regarding income when it comes to opening a Help to Buy ISA – any eligible individual on any salary can start one up, but the ISA will only be available on homes worth up to £250,000.
When can I open a Help to Buy ISA?
Help to Buy ISAs are available from 1st December 2015 via most banks and building societies. You earn interest on the Help to Buy ISA as you would a regular ISA, plus you receive a government-backed contribution on top.
Savers will be able to open a Help to Buy ISA for a four year period after the date the scheme formally opens. Once the account has been opened, you can have it and can pay into it for as long as you want to. Any type of residential mortgage deal you wish to use can accompany the ISA – so don’t worry about being restricted to Help to Buy mortgages alone.
Who can I talk to for more information?
For more information about Help to Buy ISAs speak to your preferred bank or building society.