Why not maximise your deposit savings with a Help to Buy: ISA!
The first stage of buying your home is usually the task of saving up a deposit. Depending on your lender, you’re most likely to need at least 5% of the sale price.
Saving has now got a lot simpler for First Time Buyers, thanks to the Government-backed Help to Buy: ISA scheme. Save for your deposit in one of these tax-free ISAs, and the Government will add to your savings, to make them grow faster.
How much extra money will I get?
The Government will add 25% more money on top of any monthly savings you make. You can save up to £200 a month into the account, as well as an additional £1,000 in the first month.
So - if you do save the maximum, the Government gives you £300 the first month, then £50 per month, on top of your savings. Meaning you’d be building up £4,250 plus interest, tax-free, in your first year - and it would only have cost you £3,400!
Maximum and minimum contributions
The Government’s contribution is capped at £3,000 - which you’d receive in total when you’ve saved £12,000 - giving you a deposit of £15,000.
If you wanted to take out your deposit earlier, you could withdraw it (including the 25% bonus) as soon as you’ve saved £1,600 + £400 bonus. The bonus will be paid to your mortgage lender in the form of a voucher.
You can apply for a Help to Buy: ISA at participating banks or building societies until Autumn 2019, but then you can keep it going until you reach the maximum bonus. During this period, you could switch your Help to Buy: ISA between different providers, e.g. to get a better interest rate.
Important things to remember:
You can find out more about the Help to Buy: ISA by downloading the Lovell Homes scheme leaflet.
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