Many major providers have announced how much their Help to Buy ISAs will pay in light of their launch tomorrow, with one offering 4% interest.
Chancellor George Osborne first announced the launch of the Help to Buy ISA for first-time buyers in March's Budget.
The advantage compared to traditional ISAs is that the Government will add 25% on top on everything saved up to a maximum of £12,000 – meaning a £3,000 bonus. See our full Help to Buy ISAs guide for how they work, which we'll also update with the best buys.
Here are the headline interest rates some of the major providers have revealed they'll be offering when they launch their products tomorrow:
- Aldermore is launching a Help to Buy ISA at 2%.
- Bank of Scotland is launching a Help to Buy ISA at 2%.
- Clydesdale and Yorkshire Banks are launching a 0.7% on £1-£14,999, 0.9% on £15,000-£29,999, and 1% on £30,000 and over Help to Buy ISA.
- Halifax is launching a Help to Buy ISA at 4%.
- HSBC is launching a Help to Buy ISA at 2%.
- Lloyds is launching a Help to Buy ISA at 2%.
- Nationwide is launching a Help to Buy ISA at 2%.
- NatWest is launching a Help to Buy ISA at 2%.
Virgin Money and Newcastle Building Society have confirmed they will offer Help to Buy ISAs from tomorrow, although the rates have yet to be announced.
Meanwhile, Barclays, Santander and Ulster Bank have also confirmed they'll be launching Help to Buy ISAs, but the details of the rates and when they'll be available have yet to be revealed.
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'The Help to Buy ISA is a no-brainer'
Martin Lewis, founder of MoneySavingExpert.com, says: "The Help to Buy ISA is a no-brainer for anyone saving for a home for the first time. You can have one even if the person you're buying with has owned a house – and if you're both first timers you can both get one.
"Nothing comes close to the fact they're adding 25% on top of both what you've saved and the interest on the first £12,000 – giving a maximum bonus of £3,000. The worst risk is you decide against buying a house (or buy a non-qualifying one), but even then, all that means is you don't get the bonus; but with Help to Buy ISA interest rates as high as 4% tax free, it's still a pretty decent option.
"Banks are generally offering better rates for Help to Buy ISAs than for normal cash ISAs. There are two reasons for this: first because you can't put that much money in each year, so it won't cost them too much – but crucially because they hope if you have their Help to Buy ISA you'll get a mortgage with them too.
"So it's important to know you don't need to do this – you're free to get any mortgage you want of any type (so not just Help to Buy), from any provider, not just the one you've got your Help to Buy ISA with."