Want a better deal on your mortgage?

Receive exclusive mortgage rates straight to your inbox

Call us: 0345 305 2540
Need help? 0345 305 2540
Remortgage Calculator Calculator

The Help to Buy ISA Explained

MORTGAGES | 24.03.2017

Since its introduction in April 2016, the Help to Buy ISA scheme has proven incredibly popular amongst first time buyers. Not only does a Help to Buy ISA reward savers with tax-free interest, it also boosts their savings by 25% thanks to a government bonus. For every £200 a first time buyer places in the ISA, the government increases their savings by an additional £50. Read on to learn more about this fantastic scheme.

The government tops your savings up by 25% when you use the ISA to buy a home

When you come to buy your own home, the government will boost your savings by 25%. The most you can save in the account yourself is £12,000, so the maximum government top up is £3,000. You don’t need to save the full amount but you need to have at least £1,600 saved to get the government bonus. This means you could purchase a property three months after opening a Help to Buy ISA.

You can save up to £1,200 in your first month and up to £200 a month after that

In the month that you open the ISA, you can place up to £1,200 in it. After the first month, you can place up to £200 a month in the account. There’s no minimum contribution so even if you only wanted to put £10 into the ISA one month, that’s perfectly fine. If you have a month where you can’t afford to save any money, that’s not a problem either.

You’ll need to meet the following criteria in order to open a Help to Buy ISA

You must be a first time buyer and aged 16 or over to qualify for a Help to Buy ISA. If you’re buying a property with someone else and you’re both first time buyers, you can have a Help to Buy ISA each. Together you can benefit from a government top up of up to £6,000. If you’re a first time buyer and the other person isn’t, you can still buy a property together, but only you can have a Help to Buy ISA. The property you purchase must cost £250,000 or less (or £450,000 in London) and you must be taking out a mortgage. If you’re paying for the property in cash, you won’t qualify for the government bonus.

You can take money out of the Help to Buy ISA if you need to

If you’d like to withdraw money from the Help to Buy ISA at any time, you can. However, the money that you withdraw cannot be replaced at a later date. So if for example you withdraw £100 at the start of the month to cover an unexpected expense, you can’t make up for this withdrawal by placing £300 in the ISA after pay day. You can still place no more than £200 a month in the account. If you decide you don’t want to buy a home at all, you can withdraw all the money from your Help to Buy ISA and place it in a different bank account to use for something else. However, you will lose the chance of getting the government top up. You can change your mind again at a later date and open a new Help to Buy ISA, but you’ll be starting from scratch.

Your solicitor must apply for the government bonus when you buy a home

When you’re ready to buy a property, let your ISA provider know that you’d like to close your account. Your provider will give you a closing letter which you can then give to the solicitor who is doing your conveyancing for you. The solicitor will then use the letter to apply for the government bonus. Some solicitors will charge up to £60 for the admin work required to apply for the bonus. You’ll receive your government bonus once the property purchase has been completed. If you’d like to learn more about buying your first home, please get in touch with the team at TaylorMade. We can help you find the right mortgage deal for you, saving you time, money and energy in the process.
Talk to us

If you're unsure and need some advice just give us a call, our expert team of advisers are available to help you choose the mortgage that is right for you.

0345 305 2540 info@taylormade-finance.co.uk

By clicking on the above link you will be leaving the regulated site of TaylorMade Finance Ltd. TaylorMade Finance Ltd is not responsible for the accuracy of the information contained within the linked site.

TaylorMade Finance Ltd is authorised and regulated by the Financial Conduct Authority (FCA Registration Number 669968). Company Registration Number 06742859

Complaints:

In the event that you wish to complain, you can contact us by email, telephone or letter.

Our address for this is:
Complaints Officer, TaylorMade Finance Ltd, 4 Church Road, Urmston, Manchester, M41 9BU. Our email address is info@taylormade-finance.co.uk and our telephone number is 0161 776 1089. We will then investigate the issues raised and inform you of our findings. Should you be unhappy with the resolution to your complaint you may contact the Financial Ombudsman Service, who can be contacted at the following address: Financial Ombudsman Service, Exchange Tower, London, E14 9SR.

Email: complaint.info@financial-ombudsman.org.uk
Phone: 0800 0234 567
https://www.financial-ombudsman.org.uk/

Your mortgage will be secured against your property.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Our fee for this service is 1.95% of the mortgage balance (minimum £1,295 to a maximum of £2,995 although reduced to maximum £1,995 without debt consolidation). Typically this will be £1,995.

Privacy Overview
taylormade

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.