The wait is over – the Help to Buy ISA, which was first announced in this year's Budget, has finally arrived! The scheme, which will see invested savings boosted by up to 25% through the help of a Government bonus, aims to support those who are saving for a deposit to get onto the first rung of the property ladder. The question is, will it live up to expectations?
It all comes down to the kind of rates that are being offered, and we've taken a closer look. It took a while for providers to reveal their individual accounts, but so far, the list is as follows:
As ever in the savings market, some rates leave little to be desired, but others are quite eye-catching. Halifax in particular will make savers sit up and take notice – a rate of 4% for a savings account has been unheard of in recent years, with high interest current accounts and regular savings accounts (usually loyalty versions) being the only ones that have matched or beaten that kind of deal, so it could be well worth it.
"Buying a house is one of the UK's greatest aspirations, so the Help to Buy ISA is certainly going to appeal to those who are dreaming of owning their own home," said Charlotte Nelson, finance expert at Moneyfacts. "Some providers also seem to be keen to attract these savers by offering headline-making rates, particularly if they also have mortgage products to offer.
"For example, Halifax is offering a market-leading 4.00% yearly on their Help to Buy ISA deal, which looks highly enticing when compared with the average easy access ISA, which has a rate of just 1.09%. In fact, this is the first time since January 2009 that Moneyfacts.co.uk has seen an easy access ISA pay a rate as high as 4.00%. "Clearly, by presenting themselves as the top choice for first-time buyers, Halifax hopes to one day turn its ISA savers into mortgage borrowers, but savers should remember that opting for a Help to Buy ISA with a provider does not mean that they have to take out a mortgage with them. When the time comes, they would be wise to look at the whole mortgage market first to ensure they get the best deal."
You can find out more about the Help to Buy ISA here, and by all accounts, it could be a great route to go down if you're trying to save for your first home. A Government bonus of 25% (up to a maximum of £3,000) could go a long way to building that all-important deposit, and although rising house prices could mean that minimum deposit requirements may soon exceed the maximum that can be saved in these accounts, you'll still be able to benefit from some of the best ISA rates around – as well as getting a significant boost from the Government.
It's worth pointing out that all of the ISA rates mentioned above are variable, which means that they may not stay at this competitive level forever – quite simply, if you're considering these deals you should act fast to benefit from them, and the sooner you start, the sooner your dream of homeownership could be realised!
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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