Help to buy Isa schemes unveiled - get 4% interest

young couple in a new house

First time buyers will be pleasantly surprised by the rates available on Help to Buy Isas, as the first wave of products announced today included a market-beating 4% interest rate from the Halifax.

Someone saving the maximum amount under the Help to Buy Isa scheme with Halifax would earn £1,525 in interest over five years, according to their calculations.

Giles Martin, head of savings at Halifax, said: “many see the new Help to Buy ISA as a genuine solution [to get onto the property ladder], with half of prospective first-time buyers intending to open an account.

“For those looking for an incentive to save regularly, opening this account, with a 4% interest rate from Halifax and a 25% Government bonus, will make what they do save work much harder for them.”

Bank of Scotland, Lloyds and Nationwide also unveiled accounts paying 2% interest today, joining NatWest who confirmed they will pay 2% interest to Help to Buy Isa customers.

In the run up to launch, expert commentators had voiced concerns that Help to Buy Isa products would pay low rates of interest, as Cash Isas typically earn less interest than taxable savings.

So far these fears appear unfounded, but Santander, HSBC and Virgin Money are yet to show their hands.

Newcastle Building Society is also yet to announce its rates, but it has confirmed arrangements that let customers hold a Help to Buy Isa alongside another cash Isa account.

Ben Smith, product development manager at Newcastle Building Society said: “We have an innovative facility called CustomISA that allows savers to take out more than one ISA product in a year providing you stay within your overall ISA allowance, helping savers make maximum use of their full ISA allowance.”

NS&I said it has no plans to launch Hisa products at first, but will continue to monitor the situation.