Several banks and building societies have signed up to offer the new Help to Buy Isa when it launches on 1 December.
Barclays, Lloyds Banking Group, Nationwide, NatWest, Santander and Virgin Money have all confirmed that they will be offering Help to Buy Isas, which have been designed to help first-time buyers save for a mortgage deposit.
Find out more: Which? Mortgage Advisers can give you impartial, independent advice on getting your first mortgage.
Help to Buy Isas for first-time buyers
You can find out how Help to Buy Isas will work in our two-minute video:
First-time buyers will be able to save up to £200 a month in their dedicated Help to Buy Isa, and the Government will top this up by 25% up to a maximum of £3,000. Couples buying together can have one Help to Buy Isa each.
First-time buyers who are buying a residential property worth up to £250,000, or £450,000 in London, will be eligible.
The scheme can be used in conjunction with any of the other ways the Government is helping people achieve their home-owning aspirations, including the other elements of Help to Buy and shared ownership schemes.
Find out more: get the lowdown on how Help to Buy and shared ownership might help you get on the property ladder.
Cost of buying a property
Recent figures from the Office for National Statistics (ONS) show that a typical first-time buyer faces paying 5.1% more for a property than they did a year ago. The average price paid for a starter home in May was £211,000.
But when you’re saving to buy your first home, it’s important to budget for the extra costs of moving too: most mortgages carry an arrangement fee, which varies depending on the lender. You’ll also need to factor in removals, a survey, legal fees, the possibility of increased bills and more.
Mortgage lenders will carefully assess your incomings and outgoings when deciding how much (and whether) to lend to you. Make sure you’ve done your homework and are ready to answer detailed questions about your finances and how you will fund the move so you can prove you’re ready to become a first-time buyer.
Find out more: these are the questions a lender will ask when you apply for a mortgage.
- Find out what is the best type of mortgage for you
- Explore our guide to buying and selling property
- Learn about the options available to first-time buyers
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