The much-anticipated Help to Buy ISA launched on 1st December 2015, coming just in time as more people find it challenging to save a deposit on house prices that seem to keep on climbing. Here are three of the big questions you may be asking about the government’s new saving scheme:
Am I eligible for the Help to Buy ISA?
If you’re a first-time buyer, 16 and over and are looking to buy a UK property worth up to £250,000 (£450,000 in London), then you will be eligible for the Help to Buy ISA. If you already pay into a Cash ISA, unfortunately, you will have to wait until the next tax year in April to open and start saving with a Help to Buy ISA. The accounts are available through lots of banks and building societies across the UK, so contact yours or keep an eye on the high street for the latest news.
How much can I save?
By saving up to £200 a month towards your home, the Help to Buy ISA and the government will increase your savings by 25%, or up to £50 a month. This means if you saved £200 a month for 5 years, your £12,000 savings will be boosted to £15,000! Accounts are limited to one per person, not per home, which means a couple buying together can receive a £6,000 bonus on their savings for a house! You can make an initial deposit of £1,000 when you open the Help to Buy ISA in addition to normal savings. You can save a maximum of £200 a month and interest earned on ISAs are also tax-free. There is no minimum monthly deposit, although providers can choose to impose one if they so wish.
How long can I save for and when will I receive my bonus?
The new accounts will be available for the next 4 years, but once opened, there is no limit on how you long you can save for. There is a minimum overall bonus of £400, maximum of £3,000, which you will receive when you buy your first home.