Help to Buy ISA: How does it work?

A Help to Buy ISA is a government scheme designed to help you save for a mortgage deposit to buy a home.

To qualify you must be classified as a first-time buyer and not own a property anywhere in the world.

Savings are tax-free just like with any ISA product, and a Help to Buy ISA gives you the added bonus of receiving government contributions too.

Eligibility for a Help to Buy ISA

  • You need to be a first-time buyer.
  • You must be aged 16 or over.
  • It can be used to buy any home worth up to £250,000, or £450,000 in London.
  • You can use a Help to Buy ISA with any mortgage; you’re not restricted to a Help to Buy mortgage.
  • You can’t use a Help to Buy ISA if you’re going to rent out the property.
  • You can’t use a Help to Buy ISA on an overseas property.
  • You can’t have more than one Help to Buy ISA.
  • You can’t open a Help to Buy ISA and a normal Cash ISA in the same tax year.

How it works

The government will top up any contributions you make by 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 from the government.

The minimum amount you need to save to qualify for a government bonus is £1,600, which gives you a £400 bonus.

You can start off your ISA with an initial deposit of up to £1,000, which also qualifies for the 25% boost from the government.

Help to Buy ISAs are available to each first-time buyer, not each home. So, if you’re buying a property with your partner, for example, you’ll be able to get up to £6,000 towards your deposit.

Can you use your help to buy ISA for a deposit?

Yes, but you can’t put it towards your exchange deposit.

When you exchange contracts with the seller, they can ask you to pay an exchange deposit, also known as a holding or contract deposit. You can’t use your bonus towards this as the government only pays out the bonus once the property sale is completed.

However, you can use the bonus to reduce the size of your mortgage by adding it to your mortgage deposit.

Your lender receives the government bonus after your home purchase is completed, and the bonus will then be added to the mortgage deposit, which will reduce the size of your mortgage.

The lender might ask you to provide evidence of any money saved within your ISA when you apply for your mortgage. This is to help them work out how much you need to borrow.

For instance, if you save up £12,000 with a Help to Buy ISA, you are entitled to a £3,000 bonus, but you won’t be able to use this bonus as part of your initial exchange deposit.

Instead, the bonus will go towards the full cost of your home after the sale is completed. This means your outstanding mortgage will be reduced by £3,000.

How soon can you get the money?

Once your savings have reached the minimum amount of £1,600, you can claim your government bonus at any time.

If you want to qualify for the maximum bonus of £3,000, it will take just over four and a half years.

However, it’s worth noting that you need to claim your bonus through your solicitor or conveyancer before completion, but after exchange of contracts, which might be subject to a maximum fee of £50 plus VAT.

How does it work for couples?

As long as each of you is over 16 and both of you are first-time buyers, you can both have your own, separate Help to Buy ISA.

Does the property value allocation double as there are two people?

No, the limit of £250,000, or £450,000 in London, still applies.

If you have a cash ISA already, can you open a Help to Buy one?

You can only contribute to one cash ISA in a tax year, so you will need to wait until April 6 before you can make contributions to your existing cash ISA or open a new one.

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.

More guides on Finder

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site