The Help to Buy ISA was launched on 1st December 2015, and will be available until 30th November 2019, although you can continue to save money into the account if it was opened during this period. The bonus must be claimed prior to 1st December 2030.
The ISA was introduced to help first-time buyers get onto the property ladder, earning 25% extra from the government, up to a limit of £3,000.
There are lots of advantages to this scheme, but there are also some points to consider before opening the ISA. The 25% government bonus is the obvious attraction, but if two people are considering buying a home together, each individual can open an account, so the bonus is doubled.
Unlike some accounts, you have instant access to your savings plus the interest earned. However, if this is before you buy a property, you won’t get the government bonus. There are no restrictions on the type of property you can buy, and you will be eligible for the bonus whether you buy a new or pre-owned property, as long as you are buying it to live in. You can also use the Help to Buy ISA in conjunction with other government schemes for first-time buyers.
However, if you wish to save a deposit and buy a home within a couple of years, a Help to Buy ISA may not be the best option, as you can only save up to £200 a month, taking four and a half years to get the full bonus. A CeMAP-qualified mortgage advisor can help you decide whether the ISA is the best option for you.