The Help to Buy ISA is a scheme designed to boost the amount you're able to save to put towards a deposit for your first home, with that extra boost being provided by the Government: if you save money in a dedicated Help to Buy ISA, the Government will top it up by 25%. Essentially, this means that for every £200 you save, you'll receive a Government bonus of £50, up to a maximum bonus of £3,000.
The scheme is now closed to new business, so only those whose had a Help to Buy ISA on 1 December 2019 can continue to pay in.
You can save up to £200 per month in the ISA, and to kick-start the account, you were allowed to make an initial lump sum deposit of £1,200. You'll need to have saved at least £1,600 in the account in order to receive the bonus, however, as the minimum that can be applied for is £400, and to benefit from the full £3,000 bonus you'll need to save £12,000 of your own money – which, based on the current monthly deposit allowance, would take just over four years to achieve.
As an added boost, the accounts are available to individual first-time buyers and not individual households, which means that both you and your partner can have a Help to Buy ISA and eventually receive a joint bonus of up to £6,000, which could go a long way to boosting your deposit. It's also worth remembering that the bonus won't be applied until you physically buy your first home (so you can't use the Government bonus for a sneaky holiday!). When the time comes, your solicitor or conveyancer will apply for the bonus, which will be added to the money you're putting towards your first home.
You can no longer open a new Help to Buy ISA as the scheme is now closed. However, to qualify for the Government bonus, the property you're buying must:
Note that while the Help to Buy ISA scheme is closed on 30 November 2019, you can pay in until November 2029 and still claim the bonus on an already opened account until 2030.
Now that the Help to Buy ISA scheme is closed for new accounts, first time buyers only have the option of a Lifetime ISA to save for their first home with the help of a Government bonus.
Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.