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First-time buyers can use a Help to Buy ISA to save a deposit towards their first home. Saving for a first home can be tough, so the Government introduced Help to Buy ISAs to give savers a bonus of 25% or up to £3000 (subject to meeting certain conditions). You can find out more in the information shown under the table or look at our other mortgage guides. If you would like more information about Help To Buy ISAs read our guide below.

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Nationwide BS Logo
Nationwide BS Help to Buy: ISA FSCS logo
FSCS logo
AER
2.50%
Account Type
Help to Buy ISA
Notice / Term
Instant
Interest Paid
Anniversary
Opening Account
Managing Account
Go To Provider's Site
Rates
Conditions
Information
Opening Restrictions
ISA Information
Additional Information

Rates

Rate 2.50% paid at £1
AER 2.50% paid at £1
Interest Paid Anniversary
Interest payment Interest can be paid away or compounded
Min Opening Amount £0
Max Investment £0
Introductory bonus N/A

Conditions

Number of Permitted Withdrawals Unlimited
Withdrawal Penalty N/A
Minimum Number of Payments 0
Missed Payment Penalty N/A
Regular Savings
Min Monthly Deposit £0
Max Monthly Deposit £200

Information

Min Age 16
Max Age 0
Taxation
Interest is paid tax free

Opening Restrictions

N/A

ISA Information

Transfers In - Cash ISAs
Transfers In - Stocks & Shares ISAs
Transfers In - Help to Buy ISAs
Additional Permitted Subscription ISA
Transfer Notes Initial deposit of up to £1.2K permitted.
Flexible Rules Apply
Split ISA Allowance Between Different ISAs With Same Provider

Additional Information

N/A
Penrith BS Logo
Penrith BS Help to Buy: ISA FSCS logo
FSCS logo
AER
3.00%
Account Type
Help to Buy ISA
Notice / Term
Instant
Interest Paid
Yearly
Opening Account
Managing Account
Rates
Conditions
Information
Opening Restrictions
ISA Information
Additional Information

Rates

Rate 3.00% paid at £1
AER 3.00% paid at £1
Interest Paid Yearly
Interest payment Interest must be compounded
Min Opening Amount £1
Max Investment £0
Introductory bonus N/A

Conditions

Number of Permitted Withdrawals Unlimited
Withdrawal Penalty N/A
Minimum Number of Payments 0
Missed Payment Penalty Missed payments cannot be made up in subsequent months.
Regular Savings
Min Monthly Deposit £0
Max Monthly Deposit £200

Information

Min Age 16
Max Age 0
Taxation
Interest is paid tax free

Opening Restrictions

Locals (Living in Cumbria. )

ISA Information

Transfers In - Cash ISAs
Transfers In - Stocks & Shares ISAs
Transfers In - Help to Buy ISAs
Additional Permitted Subscription ISA
Transfer Notes -
Flexible Rules Apply
Split ISA Allowance Between Different ISAs With Same Provider

Additional Information

N/A
Tipton & Coseley BS Logo
Tipton & Coseley BS Help to Buy: ISA FSCS logo
FSCS logo
AER
2.95%
Account Type
Help to Buy ISA
Notice / Term
Instant
Interest Paid
Yearly
Opening Account
Managing Account
Rates
Conditions
Information
Opening Restrictions
ISA Information
Additional Information

Rates

Rate 2.95% paid at £10
AER 2.95% paid at £10
Interest Paid Yearly
Interest payment Interest can be paid away or compounded
Min Opening Amount £10
Max Investment £0
Introductory bonus N/A

Conditions

Number of Permitted Withdrawals Unlimited
Withdrawal Penalty N/A
Minimum Number of Payments 0
Missed Payment Penalty N/A
Regular Savings
Min Monthly Deposit £0
Max Monthly Deposit £200

Information

Min Age 16
Max Age 0
Taxation
Interest is paid tax free

Opening Restrictions

Existing Customers (Before 23.5.16.) and/or Locals (Postcode areas: B, DY, WV or WS.)

ISA Information

Transfers In - Cash ISAs
Transfers In - Stocks & Shares ISAs
Transfers In - Help to Buy ISAs
Additional Permitted Subscription ISA
Transfer Notes -
Flexible Rules Apply
Split ISA Allowance Between Different ISAs With Same Provider

Additional Information

N/A
Vernon BS Logo
Vernon BS Help to Buy: ISA FSCS logo
FSCS logo
AER
2.85%
Account Type
Help to Buy ISA
Notice / Term
Instant
Interest Paid
Yearly
Opening Account
Managing Account
Rates
Conditions
Information
Opening Restrictions
ISA Information
Additional Information

Rates

Rate 2.85% paid at £1
AER 2.85% paid at £1
Interest Paid Yearly
Interest payment Interest must be compounded
Min Opening Amount £1
Max Investment £0
Introductory bonus N/A

Conditions

Number of Permitted Withdrawals Unlimited
Withdrawal Penalty N/A
Minimum Number of Payments 0
Missed Payment Penalty N/A
Regular Savings
Min Monthly Deposit £0
Max Monthly Deposit £200

Information

Min Age 16
Max Age 0
Taxation
Interest is paid tax free

Opening Restrictions

Locals (Within a 25 mile radius of Stockport.)

ISA Information

Transfers In - Cash ISAs
Transfers In - Stocks & Shares ISAs
Transfers In - Help to Buy ISAs
Additional Permitted Subscription ISA
Transfer Notes -
Flexible Rules Apply
Split ISA Allowance Between Different ISAs With Same Provider

Additional Information

N/A
Darlington BS Logo
Darlington BS Help to Buy: ISA FSCS logo
FSCS logo
AER
2.80%
Account Type
Help to Buy ISA
Notice / Term
Instant
Interest Paid
Yearly
Opening Account
Managing Account
Rates
Conditions
Information
Opening Restrictions
ISA Information
Additional Information

Rates

Rate 2.80% paid at £1
AER 2.80% paid at £1
Interest Paid Yearly
Interest payment Interest must be compounded
Min Opening Amount £1
Max Investment £0
Introductory bonus N/A

Conditions

Number of Permitted Withdrawals Unlimited
Withdrawal Penalty N/A
Minimum Number of Payments 0
Missed Payment Penalty N/A
Regular Savings
Min Monthly Deposit £0
Max Monthly Deposit £200

Information

Min Age 16
Max Age 0
Taxation
Interest is paid tax free

Opening Restrictions

Locals (Postcode areas DL, DH, SR, TS, YO and HG.)

ISA Information

Transfers In - Cash ISAs
Transfers In - Stocks & Shares ISAs
Transfers In - Help to Buy ISAs
Additional Permitted Subscription ISA
Transfer Notes -
Flexible Rules Apply
Split ISA Allowance Between Different ISAs With Same Provider

Additional Information

N/A
Cumberland BS Logo
Cumberland BS Help to Buy: ISA (Issue 3) FSCS logo
FSCS logo
AER
2.75%
Account Type
Help to Buy ISA
Notice / Term
Instant
Interest Paid
Yearly
Opening Account
Managing Account
Rates
Conditions
Information
Opening Restrictions
ISA Information
Additional Information

Rates

Rate 2.75% paid at £1
AER 2.75% paid at £1
Interest Paid Yearly
Interest payment Interest must be compounded
Min Opening Amount £1
Max Investment £12,000
Introductory bonus N/A

Conditions

Number of Permitted Withdrawals Unlimited
Withdrawal Penalty N/A
Minimum Number of Payments 0
Missed Payment Penalty N/A
Regular Savings
Min Monthly Deposit £0
Max Monthly Deposit £200

Information

Min Age 16
Max Age 0
Taxation
Interest is paid tax free

Opening Restrictions

Locals (Cumbria (all CA & LA), SW Scotland (all DG & TD9), W Northumberland (NE45 - NE49), N Lancashire (all PR, FY, LA & BB1-2 & BB5-7).)

ISA Information

Transfers In - Cash ISAs
Transfers In - Stocks & Shares ISAs
Transfers In - Help to Buy ISAs
Additional Permitted Subscription ISA
Transfer Notes Can transfer up to £1.2K as part of initial deposit.
Flexible Rules Apply
Split ISA Allowance Between Different ISAs With Same Provider

Additional Information

N/A
Barclays Bank Logo
Barclays Bank Help to Buy: ISA FSCS logo
FSCS logo
AER
2.58%
Account Type
Help to Buy ISA
Notice / Term
Instant
Interest Paid
Monthly
Opening Account
Managing Account
Rates
Conditions
Information
Opening Restrictions
ISA Information
Additional Information

Rates

Rate 2.55% paid at £1
AER 2.58% paid at £1
Interest Paid Monthly
Interest payment Interest must be compounded
Min Opening Amount £1
Max Investment £0
Introductory bonus N/A

Conditions

Number of Permitted Withdrawals Unlimited
Withdrawal Penalty N/A
Minimum Number of Payments 0
Missed Payment Penalty N/A
Regular Savings
Min Monthly Deposit £0
Max Monthly Deposit £200

Information

Min Age 16
Max Age 0
Taxation
Interest is paid tax free

Opening Restrictions

N/A

ISA Information

Transfers In - Cash ISAs
Transfers In - Stocks & Shares ISAs
Transfers In - Help to Buy ISAs
Additional Permitted Subscription ISA
Transfer Notes No initial deposit required for transfers in.
Flexible Rules Apply
Split ISA Allowance Between Different ISAs With Same Provider

Additional Information

N/A
Newcastle BS Logo
Newcastle BS Newcastle Help to Buy: ISA FSCS logo
FSCS logo
AER
2.56%
Account Type
Help to Buy ISA
Notice / Term
Instant
Interest Paid
Monthly
Opening Account
Managing Account
Rates
Conditions
Information
Opening Restrictions
ISA Information
Additional Information

Rates

Rate 2.53% paid at £1
AER 2.56% paid at £1
Interest Paid Monthly
Interest payment Interest must be compounded
Min Opening Amount £1
Max Investment £0
Introductory bonus N/A

Conditions

Number of Permitted Withdrawals Unlimited
Withdrawal Penalty N/A
Minimum Number of Payments 0
Missed Payment Penalty N/A
Regular Savings
Min Monthly Deposit £1
Max Monthly Deposit £200

Information

Min Age 16
Max Age 0
Taxation
Interest is paid tax free

Opening Restrictions

Locals (postcode areas: NE, SR, DH, TD10-15, DL, TS, CA1-17.)

ISA Information

Transfers In - Cash ISAs
Transfers In - Stocks & Shares ISAs
Transfers In - Help to Buy ISAs
Additional Permitted Subscription ISA
Transfer Notes Subject to the monthly maximums.
Flexible Rules Apply
Split ISA Allowance Between Different ISAs With Same Provider

Additional Information

N/A
Buckinghamshire BS Logo
Buckinghamshire BS Help to Buy: ISA FSCS logo
FSCS logo
AER
2.50%
Account Type
Help to Buy ISA
Notice / Term
Instant
Interest Paid
Yearly
Opening Account
Managing Account
Rates
Conditions
Information
Opening Restrictions
ISA Information
Additional Information

Rates

Rate 2.50% paid at £1
AER 2.50% paid at £1
Interest Paid Yearly
Interest payment Interest must be compounded
Min Opening Amount £1
Max Investment £0
Introductory bonus N/A

Conditions

Number of Permitted Withdrawals Unlimited
Withdrawal Penalty N/A
Minimum Number of Payments 0
Missed Payment Penalty N/A
Regular Savings
Min Monthly Deposit £0
Max Monthly Deposit £200

Information

Min Age 16
Max Age 0
Taxation
Interest is paid tax free

Opening Restrictions

N/A

ISA Information

Transfers In - Cash ISAs
Transfers In - Stocks & Shares ISAs
Transfers In - Help to Buy ISAs
Additional Permitted Subscription ISA
Transfer Notes Transfers in from a Cash ISA up to initial deposit amount of £1.2K only.
Flexible Rules Apply
Split ISA Allowance Between Different ISAs With Same Provider

Additional Information

N/A
NatWest Logo
NatWest Help to Buy: ISA FSCS logo
FSCS logo
AER
2.50%
Account Type
Help to Buy ISA
Notice / Term
Instant
Interest Paid
Monthly
Opening Account
Managing Account
Rates
Conditions
Information
Opening Restrictions
ISA Information
Additional Information

Rates

Rate 2.47% paid at £1
AER 2.50% paid at £1
Interest Paid Monthly
Interest payment Interest must be compounded
Min Opening Amount £0
Max Investment £0
Introductory bonus N/A

Conditions

Number of Permitted Withdrawals Unlimited
Withdrawal Penalty N/A
Minimum Number of Payments 0
Missed Payment Penalty N/A
Regular Savings
Min Monthly Deposit £0
Max Monthly Deposit £200

Information

Min Age 16
Max Age 0
Taxation
Interest is paid tax free

Opening Restrictions

N/A

ISA Information

Transfers In - Cash ISAs
Transfers In - Stocks & Shares ISAs
Transfers In - Help to Buy ISAs
Additional Permitted Subscription ISA
Transfer Notes -
Flexible Rules Apply
Split ISA Allowance Between Different ISAs With Same Provider

Additional Information

N/A

Select a Savings Account

Note

Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme up to a maximum level of protection of £85,000 per person per institution.

Disclaimer

All rates subject to change without notice. Please check all rates and terms before investing or borrowing.

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Still not sure?

Read all savings and ISAs guides
guide icon
The Help to Buy ISA – an overview

Everything you need to know to open and manage a Help to Buy ISA.

Read More
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Saving for your first home

Our top tips to help you save for your first home.

Read More
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How to transfer a cash ISA

This guide explains how to transfer Cash ISAs.

Read More
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Beware of land banking schemes

A guide on what the land banking scam is and how to avoid it.

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Help to Buy ISAs

Leanne Macardle

Leanne Macardle

Editor
Published: 30/01/2019

At a glance

  • A Help to Buy ISA is a special kind of Individual Savings Account that allows you to save up specifically to buy your first home.
  • As well as getting the usual tax-free benefits that come with ISAs, you’ll also get a 25% Government bonus (up to a maximum of £3,000) that can be put towards your purchase.
  • Deposit requirements are different to traditional ISAs, however, as you can only save up to £200 each month after an initial deposit. This makes them a form of regular savings account.
  • If you manage to save the maximum amount, you’ll have amassed enough (£12,000) to warrant the full Government bonus after about four years.

What is a Help to Buy ISA?

A Help to Buy ISA is a tax-free savings account designed specifically for would-be first-time buyers saving for their first home. It allows you to save up to £200 a month, after an initial deposit of up to £1,200. Once you've saved at least £1,600, a Government bonus will kick in and you will get an extra 25% on whatever you manage to save, up to a maximum of £3,000. This means that if you save the maximum every month, you'll have amassed enough (£12,000) to warrant the full Government bonus after about four years. You'll be able to keep saving for a house deposit after this, but won't get any additional bonus.

 

Aside from the bonus, you will also earn interest from your provider, which is why it’s so important to compare the options to make sure you’re getting the rate that could help you meet your goal. With the right account, you could soon have enough saved for at least a 5% house deposit (though bear in mind that the bonus can’t be used towards your initial deposit, as it can only be applied for on completion. We discuss this more below). What's more, if you and your partner are both first-time buyers and each save for a deposit using the best Help to Buy ISA available (there's only one allowed per person), you'd get double the bonus and would have enough together for a much bigger deposit, which could allow you to get a better mortgage deal.

You won't see the Government bonus in the ISA itself, as it only gets applied to your savings once you are close to buying your first home. You'll first have to close the account and obtain a closing balance statement from your ISA provider. Your solicitor or conveyancer will then apply for your Government bonus on your behalf and include the money with the funds consolidated at the completion of the property transaction. This means you won't be able to use the bonus to put towards your initial deposit.

If you've only got a 5% deposit with the bonus, this means you'll need to get the seller to allow you to use a smaller deposit at the exchange stage, as you'll be asked to put down your deposit earlier to commit everyone to the sale. It can be confusing, having to place the deposit at the exchange stage and not seeing your Government bonus added until the completion stage, but your solicitor (as well as your sellers) will hopefully understand and help you through it. Just remember to tell them in advance, so they can take it into account.

What are the restrictions?

There are of course some restrictions to this Government scheme. You will have to be at least 16, a UK resident and not own any property anywhere in the world to open an account. Then to get the Government bonus, the home you're buying needs to be in the UK, cost no more than £250,000 (£450,000 in London), be purchased with a mortgage and not be rented out (though you may be able to change your property to a buy-to-let investment later down the line).

If you've already opened a cash ISA in the current tax year (which runs from April to April), you'll only be able to transfer those funds, and even then only up to £1,200, into a Help to Buy ISA; you won't be able to open an additional active account. This is because you're only allowed to open one of each type of ISA per year, and Help to Buy ISAs are considered the same as cash ISAs (and largely follow the same rules).

If you've put more than £1,200 into the new cash ISA, the extra funds would need to be put into a stocks & shares ISA (as you are allowed to get both a Help to Buy and stocks & shares ISA in the same tax year), an innovative finance ISA, a stocks & shares lifetime ISA or a non-ISA account. ISAs you've opened in previous years do not count, though you won't be able to save more than your annual ISA allowance across all your ISAs. For the 2018/2019 and 2019/20 tax year, this allowance is £20,000.

Find out more about:

How do I open a Help to Buy ISA?

Aside from having to be at least 16 and not yet a homeowner, there's nothing stopping you from opening a Help to Buy ISA, unless you've opened a cash ISA this tax year already. The process of opening one is the same as with any savings account; you can open the account by contacting the provider you want through any of the 'account opening' methods the ISA allows, and they'll tell you what to do from there. To make the most of it, you'll want to set £1,200 aside to place into the account straight away.

If you see a Help to Buy ISA that offers a better rate, it's possible to transfer your current funds over to it. Contact the provider you want to move to so they can set things in motion through the proper channels. Do not take the money out of your ISA and then put it into a new one yourself, as this would count as opening a new ISA and could even have tax implications.

There is one exception to the rule that says you can't open and contribute to a cash ISA and Help to Buy ISA in the same tax year, and that's when a provider offers a linked ISA range. However, the interest rates on these combined accounts can be lower than those on a regular Help to Buy account.

Furthermore, as you're able to transfer your cash out of a Help to Buy ISA at any time (if the specific account allows unlimited access) and put it into a cash ISA or non-ISA savings account (you'll just lose the Government bonus), there's no reason why you shouldn't just compare Help to Buy ISAs and try saving in the best one you can find.

Note that you will only be able to open a Help to Buy ISA until 30 November 2019, which is when the scheme closes. After this, you'll still be able to save into such an ISA and claim the Government bonus until 1 December 2030.

Things to consider

There are certain things you cannot do with a Help to Buy ISA, such as buying a first home for the purposes of renting it out, using the Government bonus for any reason other than to buy a home and getting the bonus if you've already bought a house. It's important to be aware of the limitations surrounding Help to Buy, to make sure you can get the most out of it.

However, there's nothing stopping you from withdrawing your money out of a Help to Buy ISA if you decide not to buy a house. And the interest rates offered on these ISAs can rival or even beat their regular cash ISA counterparts. So, if you are eligible, why not give it a try?

Even if you're just half a year away from buying your first home, by saving the maximum you'd still be able to get a £550 Government bonus, plus any interest you manage to accumulate. And once you've saved up enough to get the maximum Government bonus, there's nothing stopping you from looking around to see if there's a better savings account out there wherein you can keep saving.

While having the Government bonus added only upon completion can make things a bit awkward during the exchange stage of buying your first home, it also means that it's harder to lose the bonus. If you've closed the account to buy your first property and the sale ends up falling through, you will be able to reopen your ISA and save the bonus for when you do successfully complete a house purchase. Note that your solicitor will need to fill in a purchase failure notification for you to show that your purchase did not complete, and that you can't use the funds to open a different account.

Help to Buy versus Lifetime ISA

An alternative way to save for a house purchase with the help of a Government bonus has now presented itself, in the form of a lifetime ISA. This latest Government saving scheme allows you to save £4,000 per year, with a 25% Government bonus offered up to the age of 50. This means you'll be able to get a much bigger bonus of £32,000 if you save the maximum each year from the age of 18, which can be used for either purchasing a first home or retirement.

What's more, you will get the maximum £1,000 Government bonus paid into your account every year, rather than paid directly to the seller upon completion, so you'll be able to gain interest on your bonus money as well as your own cash, and use the funds for a deposit at the exchange stage of buying a house rather than completion. Note that interest won't be taken into account for calculating the bonus, so you'll have to invest the maximum allowed amount yourself to make the most of it.

There are some downsides that could outweigh the possibility of getting a bigger Government boost. Unlike a Help to Buy ISA, getting your funds out of a lifetime ISA if you change your mind will result in a penalty (after the first year) that is greater than the bonus, which means you could end up with less than you put in. Then there's the fact that almost all lifetime ISAs are of the stocks & shares variety.

Moneyfacts tip

Moneyfacts tip Leanne Macardle

Only consider stocks & shares ISAs if you’re comfortable with an element of risk. There’s no guarantee of returns and you may end up with less than you put in, with returns dependent on stock market performance rather than a set interest rate.

Help to Buy ISA rates, because they are a form of cash ISA rather than a stocks & shares ISA, are more reliable. Even a variable rate ISA will still offer you some interest on your money, whereas the stock market investment that comes with almost all lifetime ISAs (at the time of writing) means you could end up with less than you originally put in if your investments perform poorly.

So, like with any comparison between cash and stocks & shares, you'll have to decide for yourself whether you'd rather have flexibility and guaranteed growth, or risk losing some money.

Find out more about stocks & shares ISAs, Lifetime ISAs and cash ISAs, so you know which one is right for you.

outline of houses on washing line

At a glance

  • A Help to Buy ISA is a special kind of Individual Savings Account that allows you to save up specifically to buy your first home.
  • As well as getting the usual tax-free benefits that come with ISAs, you’ll also get a 25% Government bonus (up to a maximum of £3,000) that can be put towards your purchase.
  • Deposit requirements are different to traditional ISAs, however, as you can only save up to £200 each month after an initial deposit. This makes them a form of regular savings account.
  • If you manage to save the maximum amount, you’ll have amassed enough (£12,000) to warrant the full Government bonus after about four years.
Best Help To Buy ISAs
Provider AER Account Type Notice / Term Min Investment
Penrith BS Logo Penrith BS Help to Buy: ISA 3.00% Help to Buy ISA Instant £1
Tipton & Coseley BS Logo Tipton & Coseley BS Help to Buy: ISA 2.95% Help to Buy ISA Instant £10
Vernon BS Logo Vernon BS Help to Buy: ISA 2.85% Help to Buy ISA Instant £1
Darlington BS Logo Darlington BS Help to Buy: ISA 2.80% Help to Buy ISA Instant £1

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