If you’re looking to buy your first home, the government’s ‘Help to Buy’ ISA may be a good way for you to save up a deposit. Senior accountant, Hayley Robins, takes you through the key things you need to know about this scheme to find out if it is right for you.
Hayley Robins blogs:
The governments announced the ‘Help to Buy’ ISA back in the summer, but the account finally launches on 01 December 2015.
This is a new scheme, designed to help first-time buyers get on the property ladder. As the account is an ISA, savers can only pay in up to their ISA limit each year (being £15,240 for 2015/16) and any interest earned is tax-free. However, this ISA is extra special, unlike a bog standard ISA the government will pay savers a bonus of 25% of the account balance when the account is drawn down and the funds are used to buy a home.
Most of the high-street banks will be offering this new account, but there are a few T’s and C’s to take note of before you open an account.
Here are the important things you need to know:
- New accounts will be available for 4 years, but once you have opened an account you can save for a long as necessary (no end date for the ISA’s have been announced at this point).
- The account is for over 16’s only.
- There is no minimum monthly amount you must save, but there is a maximum of £200 per month.
- When you first open the account you can inject a one-off amount of £1,000.
- The accounts are ‘per person’ rather than ‘per home’ – so if you are buying with someone else you can both benefit from a bonus.
- There is a minimum bonus of £400 and a maximum bonus of £3,000.
- The bonus is only available on house purchases up to £250,000 (£450,000 in London).
- The bonus is only paid out when you buy your first home. Your solicitor or conveyancer will apply and draw-down the bonus.
If you have any questions about mortgages or how you can make more of your savings to purchase a property, please do get in touch on 01872 300232 or email us at firstname.lastname@example.org.