What About Help to Buy ISAs?
If you’re a first–time buyer saving for a mortgage deposit, the Help to Buy ISA set up by the Government at the beginning of December 2015 is a no–brainer.
If you are over 16years old, you can earn interest of up to 4% and then get 25% added on top when they use it for a mortgage deposit. Nothing else comes close.
Here are the basics:
– You can save up to £1,200 in your first month, then a minimum of £200 each month after.
– When you use it for a deposit, a 25% bonus is added on top. – The minimum you need saved to get a bonus is £1,600 (which’d be £400). – The biggest bonus possible is £3,000 – which needs £12,000 saved.
– If you’re buying with someone who’s owned before you can get one, they can’t. If two first–time buyers buy together, they can both get one.
– You need to use it on a property costing £250,000 or less, or £450,000 or less within the London boroughs.
– You don’t have to use it for a deposit. You can make partial (or full) withdrawals. You’d still get the interest just not the bonus.
– Help to Buy ISAs can be used with ANY residential mortgage (normal mortgage, new build, shared ownership, Help to Buy), just not buy–to–let.
– And don’t think if you get a top–paying Help to Buy ISA from a particular lender that you must also get its mortgage.
You’re free to get a mortgage from anyone so you should ALWAYS check across the market.
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Source: www.landc.co.uk/ml/mortgage–guide
