Help to Buy ISA Scheme

The Help to Buy ISA Scheme, open to first time buyers only, is designed to encourage people wishing to buy homes to save for buying a home. The Government encourages this by offering a bonus of 25% on top of the money saved – subject to terms and conditions – with a maximum bonus of £3,000 on offer.

The Help to Buy ISA does come with strict terms and conditions as to how you can benefit from the Government's bonus. The major one is what you can use your savings to buy - if you were hoping to use it to fund your 10% deposit on exchange, then you'll need to think again - read on to find out more.

(If you already have a Help to Buy ISA and want to know how to claim your bonus read this - Managing your Help to Buy ISA)

*Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels

Fixed Fee, No Sale No Fee and Unbeatable Value Solicitors.


How does the Help to Buy ISA work?

  • You can pay in a maximum of £200 each month - although you can open your ISA with a one-off £1,000
  • The minimum bonus you can get is £400 (with a closing balance of £1,600) and the maximum bonus is £3,000 (with a closing balance of £12,000).
  • You only get the bonus ISA is put towards a home purchase.
  • You can withdraw the money as cash, much like a normal ISA, and receive any interest owed. However, you will not get the Government’s bonus.
  • You have to pay a solicitor £60 INC VAT to redeem the ISA (read this article to find out how to redeem your Help to Buy ISA).
  • Each aspiring home buyer can only have one ISA but there's nothing to stop two or more people (up to a maximum of 4 people permissible on any property’s mortgage deeds) pooling their Help to Buy ISAs when buying a property.
  • The Help to Buy ISA is restricted to homes worth up to £250,000 outside London, rising to £450,000 in London.
  • You must take out your Help to Buy ISA by 30 November 2019. You must claim your bonus by 1 December 2030 at the latest.

What can you spend the Help to Buy ISA on?

Here is a list of what you can spend your Help to Buy Isa on and still be able to get your bonus:

  • The purchase price of your property - not including the 10% deposit that the Help to Buy ISA cannot be used for if you are getting a mortgage.

If you use it for any of the following then you can use the saved money, but won't benefit from a bonus:

  • 10% exchange deposit;
  • Solicitors' legal fees;
  • Estate agent fees;
  • any other indirect costs;
  • on a property priced over £250,000 outside of London and £450,000 inside London; or
  • if you aren't getting a mortgage.

You may think it crazy, but you cannot use the Help to Buy ISA to fund your deposit. If your plans are to use the deposit to fund your deposit then you can use the savings and the interest, but can't benefit from the bonus. If you need you Help to Buy ISA to fund your deposit then you'll have to exchange and complete on the same day. Read this article to find out - How long between exchange and completion?

Which providers can you go to?
Aldermore, Bank of Scotland Barclays, Buckinghamshire Building Society, Chorley Building Society, Clydesdale Bank, Cumberland Building Society, Darlington Building Society, Halifax Plc, HSBC, Lloyds Bank Plc, Monmouthshire Building Society, Nationwide Building Society, NatWest Bank Plc, Penrith Building Society, Progressive Building Society,  Newcastle Building Society, Santander, Tipton & Coseley, Ulster Bank, Vernon Building Society, Virgin Money and Yorkshire Bank.

Do you get interest on your Help to Buy ISA?

The providers are currently offering 4% interest per annum on any savings and this is added onto the savings.

As referred to, the interest payable on a Help to Buy ISA is comparable to how interest works on a cash ISA. Presently, providers are offering up to 4% per annum. This interest accumulates and counts towards how much bonus you get up to the maximum figure of £12,000, which gives you the £3,000 maximum bonus.

It therefore pays to shop around to get the best possible interest rate.

Are you able to take out a Help to Buy ISA and a cash ISA in the same tax year?

No. But you are allowed can transfer up to £1,200 of your active cash ISA balance into a Help to Buy ISA, and some providers allow you to save into a cash ISA and a Help to Buy ISA within the same ISA wrapper. However, the standard cash ISA and Help to Buy ISA allowance limits still apply.

How long does it take to save to get the maximum bonus?

Months     Total Savings    
(exc Interest)    
Potential Bonus    















You can get to the maximum bonus quicker, within 55 months (4 years 7 months), by investing £1,000 as your opening deposit.

Should you get a Help to Buy ISA if it can't be used for a deposit?

Deciding whether or not you should get a Help to Buy ISA depends on your own financial position however as you cannot use it to fund the deposit on your property you'll need to be saving for your 10% deposit somewhere else. From what we can see, the objective of the scheme is:

BulletGet First Time Buyers Saving; and

BulletLower the mortgage amount you need to get.

An example of point 2 is this. If you have already saved a 10% deposit in a savings account, then you could look to continue saving in a Help to Buy ISA. What ever you save in your Help to Buy ISA can be added onto your 10% deposit, and then you can go for a smaller mortgage. For example:

£150,000 purchase price, less your £15,000 deposit (not HTB) and a £5,000 HTB ISA, means that you need a £130,000 mortgage, instead of a £135,000. The benefits of a smaller mortgage are often linked to a better mortgage product with a lower interest rate. The question is can you wait another 2 years whilst you save that extra £5,000 in your HTB ISA or would that mean the £150,000 is no longer worth this, it is now worth £160,000 due to property prices going up?

Getting money a bonus from the Government is definitely an exciting prospect, however don't rely upon it to pay your deposit, otherwise you'll be left disappointed and with no bonus.

*Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels


Related News Articles

Exchanging Contracts
Help to Buy Home Buy Schemes
Managing your Help to Buy ISA
What happens on completion day?

Log in to your FREE online Conveyancing Process

Complete your to-do lists, save your progress, watch our videos and follow our tips to lead you through from instructing your solicitor to when you finally move in. Our simple, easy to use process has already helped over 2,857 people move home in 2017 and it is FREE to use.