The government's Help to Buy Isa, a savings product that is specifically geared up to help first-time buyers save for a home, is set to close to new savers on 30 November 2019.
The Isa, which was launched in 2013, has paid out 225,618 bonuses which have helped first-time buyers purchase 169,980 properties. Couples buying a home together are able to save separately and each claim their own bonus.
The government claims that first-time buyers using Help to Buy Isas are able to buy a property three years sooner than those who do n0t use the scheme.
All savings held within the Isa are tax-free, and the government pays an additional 25% on what you save, provided it's put towards the cost of your first home.
However, there are some caveats to bear in mind:
If you've already opened a , you have until 1 December 2030 to buy your first home and claim your bonus. If you haven't yet opened an account, you'll need to do so before the end of November, as the government will be withdrawing the product from the market at that point.
|Account||AER||Minimum initial deposit|
|Barclays Help to Buy Isa||2.58%||£1|
|Newcastle Building Society Help to Buy Isa||2.56%||£1|
|Nationwide Help to Buy Isa||2.5%||£1|
|Virgin Money Help to Buy Isa||2.5%||£1|
|NatWest Help to Buy Isa||2.5%||£1|
Source: Which? Money Compare. Correct 7 January 2019.
Some regional building societies offer even higher rates, but are only available to customers who live nearby.
Penrith Building Society, for instance, pays 3.00% AER on balances over £1 - but only those with a Cumbria postcode can open accounts with the bank.
If you miss the November deadline, or don't think a Help to Buy Isa is right for you, there are other products to help first-time buyers.
With this, you'll also receive a bonus of 25% on what you pay in.
As with the Help to Buy Isa, the lifetime Isa comes with restrictions. They include:
Monmouthshire Building Society First Home Bonus Saverpays 5% AER for the first five years if you deposit a minimum of £20. After five years, the AER reduces to 1%.
It's a high rate, but you won't benefit from the 25% government bonus, and should note that the account is only available to customers who live in the bank's catchment area.
The Hanley Economic Building Society Home Deposit Saver is available nationwide, and pays 3.10% AER when you make a minimum initial deposit of £100.
This account won't pay the government bonus either, and comes with other restrictions.
You'll lose 180 days' interest as a penalty if you spend the money on anything other than a housing deposit - and you'll also incur a penalty if you don't opt for a mortgage linked with Hanley.