The government is to introduce a new Help to Buy Isa to help first-time buyers save for a mortgage deposit.
The new products will be available from this autumn, and the government will top up consumers’ savings towards their first home.
Bonus for Help to Buy savers
For every £200 a homebuyer puts into the Help to Buy Isa, the government will add a bonus of £50 on savings of up to £12,000, with a maximum bonus of £3,000.
Savers will be able to make an initial deposit of up to £1,000 to open the account and then save up to £200 a month in their Help to Buy Isa.
Warning: If you will want to open a Help to Buy Isa when they’re launched in the autumn make sure you don’t add any money to a cash Isa within the 2015/2016 tax year, which starts on April 6th. You can’t contribute to a cash Isa in the same tax year as a Help to Buy Isa.
Find out more: Help to Buy Isa – How it will work
Help to Buy Isas available for four years
Help to Buy Isas will be available from banks and building societies for four years after they’re launched, but once an account is open there will be no limit on the time period savers can use it for.
The Isa will be available for homes costing up to £250,000 or £450,000 in London, and the bonus will be paid when the buyer purchases their property.
People jointly saving for a property will both be able to benefit from the bonus payment as it will be paid per person, rather than per property.
Find out more: First time buyer mortgages – find out the deals available to first time buyers
- Which? Mortgage Advisers – independent advisers can help you find the right deal
- Help to Buy explained – How the Help to Buy scheme works
- Buying a house – our step-by-step guide to your home move
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