We’ve talked about the various Help to Buy schemes on this blog before, but it’s worth focusing on the impending Help to Buy ISA scheme which is due to become available from December. The scheme is a cash boost for first time buying individuals designed to help them afford the deposit for a mortgage. It’s important to know what it’s all about though so here are a few facts and details about the scheme.
How Does the Help to Buy ISA Work?
When you open an ISA, you put in the money you have saved for your deposit, and when it comes time to pay the deposit on a mortgage, the government will add a 25% boost (based on what you have saved already). The minimum amount you need to have saved in the ISA is £1,600 (for which you would then receive a £400 bonus), and the maximum amount you can receive a bonus for is £12,000 (which would get you a bonus of £3,000). If you have more than that saved, you can still use the ISA, but you just won’t get a larger bonus than on the 25% of the £12,000.
Only First Time Buying Individuals are Eligible
If you are aged 16 or over and have never owned any kind of interest in a residential property, then you can apply for the Help to Buy ISA scheme between December 2015 and December 2020. You must be a first time buyer, which also includes not owning (in part or in full) and never having owned property abroad as well as in the UK.
The scheme is also purely for individuals, so you are eligible for the scheme if you are a first time buyer even if your partner isn’t. If you are a couple who are both first time buyers, then you can each apply for your own separate schemes.
Maximum Property Price
Throughout most of the UK, the maximum property price the scheme can be used for is £250,000, but that rises to £450,000 in London. All properties within that price range are eligible regardless of whether they are new builds or not. You can also use this ISA boost with any mortgage, not just the Help to Buy ones, and you can combine it with your other savings in order to get the best deal you can.
Remember that only one ISA is available to each individual, but you are also not stuck with the ISA should your circumstances change. You can take the money out whenever you want, with the only consequence being that you won’t get the bonus payment for your deposit (which is probably not needed anymore anyway if you are taking the money out). If you looking to become a first time buyer, it’s worth checking all the facts about the Help to Buy ISA scheme as it can really help you get the most out of your first-time buying experience.