More than a million savers open a Help to Buy: ISA
Over a million people have opened a Help to Buy: ISA to give them a leg up onto the housing ladder when they purchase their first home, government figures show.
It’s proving popular because the savings attract a welcome cash bonus.
First time buyers can save up to £200 a month, with the government topping up their contributions by 25%, up to a maximum bonus of £3,000.
And the number of providers – which include The Nottingham – has more than doubled from its launch in December 2015 to 28.
Hatty Gibbs-Hollowell, 27, from Mapperley in Nottingham, is a fan of the new account.
She said: “I opened one because I’m hoping to buy a house in the next couple of years, before I’m 30.
“It is a good interest rate and with it being a passbook account it’s a deterrent to me withdrawing from it – encouraging me to save more – and I actually like being able to see it grow as well."
Savers can put in a relatively small amount each month if they prefer and still get a bonus, as long as they reach £1,600 in total, which is the minimum required.
“I’m aiming to save as much as I can in it each month – that’s my goal," said Hatty.
“Without the scheme I would still be saving towards a house but it would be much harder as interest rates are poor and obviously the government money will massively help.
“At least three of my friends have considered it – and two of them are likely to open an account soon.”
So by saving regularly first time buyers can build a healthier deposit and potentially cut the overall costs of their mortgage.
Jenna McKenzie-Day, senior product manager at The Nottingham, said: “It is an option for first time buyers who want to kick start their savings for a house deposit or those that have already started saving and would like to boost their funds with a 25% bonus from the government on completion of their property purchase.
“If you are buying the property with another first time buyer, you could both open an account and double the available bonus.”
The money becomes available the moment you complete on your house deal.
While saving in your Help to Buy: ISA why not inquire about our whole of market mortgage service at The Nottingham to help find the right mortgage for you?
Here are the other Ts and Cs – please refer to the Help to Buy: ISA fact sheet for more information.
The Help to Buy: ISA is for first-time buyers looking for a property anywhere in the UK with a purchase price of up to £250,000 – or £450,000 if it is in London.
- When you finally come to buy the house, your chosen eligible conveyancer will apply for the 25% contribution from the government.
- If you save £1,600 yourself (the minimum allowed on this scheme to claim a bonus), the government will add an extra £400 to make a total of £2,000.
- If you’re able to save the maximum £12,000, the government pays £3,000, making it up to £15,000.
- You’re allowed to put in up to £1,200 as your opening payment, followed by monthly deposits of up to £200, a savings cap set by the government.