Halifax slashes Help to Buy Isa rate for new customers
Halifax has cut the rate on its Help to Buy Isa from 4% to 2.5% for new customers, relinquishing its position as the best in the market.
The change doesn’t affect existing customers, who will continue to earn 4% interest, plus the standard 25% bonus when completing on a mortgage.
Halifax’s rate cut means Santander’s Help to Buy Isa stands alone as the best in the market. Last month it boosted its rate to 4%, having previously offered 1.5% to new customers and 2% to existing customers.
A Halifax spokesperson says: “As the brand to offer a significantly higher rate of interest than its competitors when Help to Buy ISA launched in December 2015, we have seen unprecedented demand. This change maintains the rate for existing customers, and keeps Halifax within the top three rates when compared to its main competitors.”
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.