In this guide, we’ll cover how you can apply for a Help to Buy ISA when purchasing your first home.
If you are looking to buy your first home, it’s likely that you’re already aware of the Help to Buy scheme. If not, take a look at our simplified Help to Buy ISA guide. Read on to discover how you can get involved with the scheme.
1. Choose a bank, building society or credit union
Before applying, you’ll need to choose an eligible bank, building society or credit union to set up your Help to Buy ISA with. You can apply either online, in-person or over the phone, depending on the provider you opt for.
The official government Help to Buy website provides a full list of Help to Buy ISA providers, however, don’t worry if your current bank isn’t on the list as you can set an ISA up with any of the banks or building societies on the website.
2. Set up your Help to Buy ISA
Setting up your Help to Buy ISA is just as easy as setting up any other savings account, and for many providers you don’t need any money at all to get started. If you’re already banking with a Help to Buy ISA provider, then you’ll need to contact your bank online, over the phone or in-person to set up your new ISA account. If not, you’ll need to register with a new provider.
To set up your Help to Buy ISA you’ll need to meet the eligibility criteria above, and depending on your provider, you may also need to provide proof of your address for the last few years.
3. Start saving!
The government will boost your savings by 25%, therefore, it’s important to save as much as possible to reap the biggest reward from your Help to Buy ISA. Within your first month, you can deposit a lump sum of up to £1,200, however, after this you can only save up to £200 per month in a Help to Buy ISA.
The minimum government bonus payment you can get is £400, for which you will need to save at least £1,600. The maximum government bonus you can get from the scheme is £3000, for which you will need to have saved £12,000.
How much interest can you earn on a Help to Buy ISA
It’s important to take careful consideration when choosing the right bank to set up your Help to Buy ISA with, as different banks offer different interest rates and additional benefits. For example, Barclays offer 2.58% AER variable interest on their Help to Buy ISAs, whereas, Nationwide offer 2.5% AER variable.
In order to make your money go further, take some time and compare offers to make sure you’re making the right choice. However, you can switch Help to Buy ISA providers as many times as you want, therefore, you can change providers as and when your interest rate changes to get the best deal.
How to claim your Help to Buy ISA bonus
In order to claim your Help to Buy ISA bonus, you’ll need to make sure that:
- The house you want to purchase costs less than £250,000 (less than £450,000 in London)
- You and your solicitors have agreed on a date for completion
- Your Help to Buy ISA has been closed and your solicitor has received the closing documents
- Your solicitor has submitted your bonus request and has confirmed how much money you’re entitled to
- You have received a completion statement showing how much you’ll need to pay (excluding the bonus amount)
‘How many Help to Buy ISAs can I have?’
You can only have one active Help to Buy ISA at any one time, and you can’t open a new one every year like a cash ISA. However, it’s important to remember that you can only apply for a Help to Buy ISA until the 30th November 2019 and you must claim your bonus by the 1st December 2030, therefore, there’s not much time to participate in the scheme.
First-time buyer solicitors
If you’re unsure about any part of the Help to Buy scheme, or have any questions regarding the scheme, get in touch with our residential property solicitors. Fill in our contact form and a specialist solicitor will be in touch promptly.