Help to Buy Isas: how they work


The scheme launched on 1 December 2015, and 15 banks and building societies currently offer them. We've reviewed the products and highlighted the top deals in our Best Help to Buy Isas guide.  

But before you check out the best deals, here are the essential 'need to know' questions and answers. If you have others, ask in the comments section below. 


What is a Help to Buy Isa?

Essentially it is a Cash Isa that helps people save a deposit to buy their first home. The government will contribute £1 towards your deposit for each £4 you save, up to a maximum contribution of £3,000 on savings of £12,000.


How does the bonus work?

The bonus is paid on regular savings of up to £200 a month, which will earn an up to £50 monthly top-up.

You can also deposit a lump sum of up to £1,000 when you open the Help to Buy Isa, which will also earn the 25% bonus.

The bonus is also paid on any interest earned on your savings, up to the maximum of £3,000.

Your bonus will be included in the cash that’s handed over to the seller at the final stage of the deal when you complete. That means it won’t be available for costs before you complete your deal, such as solicitor fees, survey costs or any deposit you pay when you exchange contracts.

You can however use the deposit to pay for your mortgage deposit – see Help to Buy Isas will still help you to get a mortgage for more information on this.


How do I get the money?

The bonus is calculated and paid when you come to buy your property. Your solicitor will arrange the paperwork, and the bonus is paid to the seller with the rest of the money, including your mortgage balance, at the end of the house buying process.

By law, solicitors are not allowed to charge you more than £60 (£50 + VAT) for this administration. 


Can I join the scheme if I already have an Isa this year?

Yes, but as you’re only allowed one Cash Isa each year, you’ll need to transfer any savings you’ve already made to the new Help to Buy Isa account.

If you’ve saved less than the £1,200 (£1,000 lump sum, plus first month's regular savings) that you can open an account with, you’re fine to simply transfer the cash. If you’ve saved more than £1,200, you have a few options:

  • Close the account completely, and then restart with a Help to Buy Isa. If you do this, anything you've already saved into an Isa will be lost from your £15,240 savings allowance for the year.
  • Switch to an account that lets you hold a Cash Isa alongside a Help to Buy Isa. Currently, Aldermore, Nationwide and Newcastle Building Society offer these products. This is basically a work-around for the one Cash Isa per rule year. They do this by putting your Help to Buy Isa and other savings account inside a single 'parent' Isa. 
  • Transfer any savings from the current year into a stocks and shares Isa, and then open a Help to Buy Isa. This is only suitable if you're willing to take some investment risk, and your annual allowance will be split across the two accounts. 


Can I transfer between Help to Buy Isas?

Yes. This is similar to transferring between Cash Isas. However, as you're only allowed one Help to Buy Isa (rather than just one per year), you'll have to transfer all of your savings over. The Treasury has confirmed this won't affect your 25% top up. However, as most accounts pay interest annually, you may forfeit up to a year's interest.


Can I put investments in a Help to Buy Isa?

No, the scheme is only available for Cash Isas, though you may be able to invest to save for a property using a lifetime Isa, which is due to launch later this year. 


Do I have to buy a home with the cash?

You’re free to use the Isa savings however you like, but you’ll only get the extra cash from the government when you have completed your first property purchase.


Who can use it?

The scheme is only available to first-time buyers. To be eligible for the government contribution, the property must cost no more than £250,000, or £450,000 if you’re buying in London. There’s no upper age limit on the scheme, but you’ll need to be 16 or older to open a Cash Isa.

Buy-to-let investments are ineligible.


How long is the scheme available for?

Under the current plans, you can open a Help to Buy Isa until 2019, and you'll have to claim the bonus by 2030.


What other support is available for first-time buyers?

Some providers offer similar savings products that pay a bonus on savings for a house deposit. For example, the Newcastle Building Society pays an extra £1,000 to first-time buyers if they save using the Big Home Saver Isa, providing they take out a mortgage with the same provider. Newcastle has confirmed it is offering a 'portfolio Isa', which lets you hold multiple cash Isas within the same wrapper. That means if you're able to save more you can use the two schemes in tandem, potentially meaning first-time buyers can get a £4,000 bonus, rather than the £3,000 up for grabs through the Help to Buy Isa.

The government also offers a Help to Buy equity scheme, where the government will pay 20% of the property price in exchange for a 20% equity stake, rising to 40% in London. This can be used in conjunction with the Help to Buy Isa.

There’s also the Help to Buy mortgage guarantee scheme, where the government guarantees repayment of your loan to the lender, making it easier for people to borrow with smaller deposits.


For more details of government support for first time buyers, visit