For first time buyers, the dream of getting a foot on the property ladders may be a reality sooner than they may expect with the government’s recently unveiled Help to Buy ISAs. This latest announcement is set to make saving for an initial deposit easier and, aims to give first time buyers a valid alternative to banks’ current low rate savings accounts.
Interested in finding out more? Read our guide today so you can be one of the first to benefit from the new Help to Buy ISA.
What Is the Help to Buy ISA?
With the Help to Buy ISA first time buyers will be able to boost their savings with a bonus payment from the government once they are ready to buy their first home. The contribution from the government will be equal to 25% of their savings; meaning for every £200 a month you save, the government will top that up by £50.
The minimum government contribution is £400 so you will have to deposit at least £1,600 in total into your account to benefit from the bonus.
How Much Can I Save a Month?
When you first open the account, the initial deposit is capped at a lump sum of £1000. After this, you can pay up to £200 a month into your account.
Under this initiative, the government will contribute a maximum of £3,000 towards the deposit for your first home. This means you will have to deposit £200 a month for 5 years in order to receive the full government contribution.
Will I Qualify?
If you have never previously owned a home and are aged 16 years or over, you’ll be eligible to open a Help to Buy ISA. Any funds saved in this ISA can only go towards buying your first home; it can’t be used to fund a buy-to-let property even if you don’t already own a home.
How Long Can I Save For?
Once the Help to Buy ISA launches you will have four years to sign up for an account. Don’t worry if you’re planning to save for longer than a four year period, once you have opened an account you can keep paying into it until you find your perfect first home.
When is it Available?
George Osborne has announced that Help to Buy ISA accounts will be available to open by first time buyers from autumn this year.
Where Can I Open a Help to Buy ISA?
The Treasury have said that Help to Buy ISAs will be available at banks and building societies across the UK. Savvy savers will even be able to switch between ISA providers to ensure that they are getting the best possible deal.
If you’re looking for your dream first home, view Stewart Milne Homes’ fantastic collection of homes for first time buyers online today.