If you’re a first time property buyer saving up for a deposit to buy a house, this could become a little easier this year with the introduction of the government’s new Help to Buy ISA.
Take a look at our guide to everything you need to know about Help to Buy ISAs below.
If you’re a first-time buyer, the Government will give you a cash boost towards buying your first home if you save into a Help to Buy ISA.
Under the new Help to Buy ISA scheme, which launches this autumn, you will be able to save up to £200 every month and the government will add 25% on top.
That’s a £50 bonus for every £200 you save and you can potentially receive a bonus of up to £3,000.
First-time buyers who save in a Help to Buy ISA will have their savings boosted with a payment from the government when they decide to buy a property.
So for every £1 you save the Government will give you 25p, for every £200 you save, the government will give you £50 – that’s 25% of your savings.
It’ll match that up to a maximum of £200 each month, up to a total of £12,000.
Not everyone qualifies for a Help to Buy ISA. Help to Buy ISAs are only for people (or groups of people) buying their first home to live in so if you already own a property this ISA isn’t for you.
See below for the full criteria.
You do qualify if…
• You’re a first-time buyer.
• You’re aged 16 or over.
• You want to use it to buy any home worth under £250,000 (or under £450,000 in London).
• You can use a Help to Buy ISA with any mortgage; you’re not restricted to a Help to Buy mortgage.
You do not qualify if…
• You’re going to rent out the property.
• You want to buy an overseas property.
• You already have Help to Buy ISA.
• You can’t open a Help to Buy ISA and a normal Cash ISA in the same tax year.
If you’re interested in applying for the Help to buy ISA scheme, banks and building societies will start offering them from autumn 2015. Until then you can start saving for the maximum £1,000 initial deposit now.
Don’t forget, if you’re planning to open a Help to Buy ISA this year don’t open a new Cash ISA after 6 April 2015 – you won’t be allowed to have both. If you have already opened a cash ISA this year you will have to wait until April 2016 to apply.
For more information about Help to Buy ISAs visit gov.uk here.