Everything You Need To Know About The Help To Buy ISA

At the moment you may be noticing the term ‘Help To Buy: ISA’ being mentioned all over the internet and social media, but what is it? Castles Estate Agents want to break down everything that you need to know about a Help To Buy ISA as it may help you in the future and the deadline to apply for one is getting closer. If you would like any more information on buying a home in Swindon please contact Castles Estate Agents on 01793 611 677 for more information 


Help to Buy ISAs are a type of ISA designed to help first-time buyers save up a deposit for their home. The government will add 25% to your savings between £1,600 and £12,000 to help you save for a deposit, with a maximum bonus of £3,000 available. This opportunity, however, will end on November 30th 2019. 


What is a Help to Buy ISA? 


A Help to Buy ISA is a government scheme designed to help people save for a mortgage deposit to buy a home. To qualify you must be a first-time buyer and not own a property anywhere in the world. Savings are tax-free just like with any ISA product, however, a Help to Buy ISA gives you the bonus of getting government contributions. 


How Do Help To Buy ISAs Work?


The government will top up any contributions you make up to 25% up to the contribution limit of £12,000. So, for every £200 you save, the government will contribute £50. This means you can earn a maximum of £3,000 for the government. 


The minimum amount you need to save to qualify for a government bonus is £1,600 which will give you a £400 bonus. You can even start your ISA with an initial deposit of up to £1,000 which will qualify you for the 25% boost from the government. Help to Buy ISAs are available to each first-time buyer not home so if you are moving in with your partner, for example, you can potentially save up to £6,000 towards your deposit. 


Who Qualifies To Open A Help To Buy ISA?


Any resident of the United Kingdom can open a Help To Buy ISA - but to qualify for a bonus you need to use the money to buy your first home and buy a home costing a maximum of £250,000 or £450,000 in London. To qualify you must...


  • Be a first-time buyer

  • You must be aged 16 or over

  • You can use a Help To Buy ISA with any mortgage. 


You will not qualify if...


  • You’re going to rent out the property

  • The property is overseas

  • You already have a Help To Buy ISA


How And When Does The Bonus Get Paid? 


If you have saved up for your mortgage deposit using a Help To Buy ISA and are ready to buy your first home, do not just withdraw the money as there is a process which will need to be followed to claim your bonus. 


  1. Tell your bank that you are ready to buy your first home and would like to close the account. You will then receive a closing letter from the ISA manager. 

  2. Give the closing letter to your property solicitor or conveyancer. They will use the letter to apply for your government bonus. 

  3. The bonus will be transferred to your solicitor. 

  4. Your solicitor will complete the purchase of your home using the full bonus amount in addition to your deposit. 


You can only use your Help To Buy ISA for the purchase of a property itself and not other costs. Once your savings have reached the minimum amount you can claim your government bonus at any time. 


It is worth noting that if the home purchase doesn’t go through after the solicitor has received your government bonus, you can reopen a Help To Buy ISA. All you have to do is ask your solicitor for a ‘purchase failure notification’ and show it to your bank, who will then re-open your account. 


How Long Are Help To Buy ISAs Available?



Help To Buy ISAs are available until November 30th 2019. They will not be available to new savers after this date, however, if you have already opened an account before this date you will not be affected. You must claim your bonus by December 1st 2030

Castles Estate Agents 


If you are a first-time buyer and you’re on the hunt for your dream home, Castles Estate Agents can help. Castles Estate Agents can promise you expertise in the industry as well as local knowledge of the market and the area. We will use knowledge to help you find the best deal for your new home. If you would like more information on buying a property in Swindon please visit our website today or call us on 01793 611 677.