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Help to Buy ISAs

First-time buyers can get £3,000 help to buy a property

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Martin | Edited by Amy

Updated October 2016

Help to Buy ISAs are a no-brainer if you’re a first-time buyer saving for a mortgage deposit. You can earn up to 2.27% interest tax-free and then the state will add 25% free cash, and it could be £1,000s, on top of what you save.

This guide will take you through everything you need to know about Help to Buy ISAs, who can get them, how to use them and what you can do if you change your mind, plus we clear up the can it really be used for a house deposit? confusion. We then compare all the best-buy Help to Buy ISA deals.

The 14 Help to Buy ISA need-to-knows

  • You can save up to £1,200 in your first month, then up to £200 a month after that

    If you've got less, you can put in less and it'll still work, and you can keep contributing as long as the scheme lasts.

    If you miss a contribution one month, it's not a problem, though you can't make it up the next month (ie, you can still only put £200 in the next month).

    If I don’t have the full £1,200, should I wait to open one?

    Are my savings safe in a Help to Buy ISA?

  • The state adds 25% tax-free to whatever is in the ISA when you use it to buy a home

    House made from moneyEven with all the hype about the new personal savings allowance, if you're a first-time buyer, putting your cash in a Help to Buy ISA before thinking about any other savings is a no brainer.

    So at the point you use the ISA to buy your first home, all the money you have put in and the interest will have 25% added to it, with two exceptions:

    • You need to have at least £1,600 saved to get the bonus (so you'd get £400 extra).
    • The most you'll get the bonus on is £12,000 (so a £3,000 bonus). If you have more than that you can still use the ISA to save, you just won't get more than £3,000 on top.
    How much state top-up you'll get
    Amount in Help to Buy ISA Bonus Added Amount in Help to Buy ISA Bonus Added
    £1,600 (the minimum to get bonus) £400 £7,000 £1,750
    £2,000 £500 £8,000 £2,000
    £3,000 £750 £9,000 £2,250
    £4,000 £1,000 £10,000 £2,500
    £5,000 £1,250 £11,000 £2,750
    £6,000 £1,500 £12,000 £3,000

    The bonus scheme's set to keep paying out on Help to Buy ISA savings until December 2030. So you could put in just a small amount per month and take years to build up your bonus. However, you risk a future government changing the rules before 2030, meaning they'll stop paying bonuses.

    Is it worth me getting one if I'm buying a home in the next few months?

  • Every first-time buyer aged 16 and over can open one

    Anyone can get one, as long as you're a first-time buyer or plan to be in the future and frankly even if you've only an inkling you may buy a house, it's worth starting it off.

    You can open one anytime between 1 December 2015 and December 2019 and you'll still get the bonus added as long as you use it for a deposit until 2030.

    As for what a first-time buyer is – the definition is strict. It's someone who doesn't own and has NEVER owned an interest in a residential property, either inside or outside the UK, whether it was bought or inherited.

    Can I open one for my children? Is it a good idea?

    Can 16 & 17 year olds have a Help to Buy ISA and a Junior ISA at the same time?

  • It's an individual product, couples are treated separately

    Help to Buy ISAs are for individuals, it's not about who's buying the house, it's simply about whether you're a first-time buyer. To make it plain:

    • If you're a first-time buyer, buying with someone who's owned before, you CAN open one, they CAN'T.
    • If you're a first-time buyer, buying with another first-time buyer, you CAN BOTH open one. So, together, you can save £400 a month and double the bonus.
    Help to buy ISA for couples Help to buy ISA for couples
  • It can be used for any property costing under £250,000 (£450,000 in London) and any mortgage

    The bonus will only be available on homes worth up to £250,000, or £450,000 in London (defined as inner and outer London boroughs). Unlike some other government schemes, you're not restricted to buying a new build; any property works - provided you're buying with a mortgage (you won't get the bonus if you're a cash buyer).

    • You can use it with any mortgage type, it DOESN'T have to be a Help to Buy mortgage (though it can be), but it must be a residential mortgage, including self-build and shared ownership, but not buy-to-let.
    • Do note, though, with shared ownership, that you'll only get the bonus if the total property price is under £250,000 (£450,000 in London) - it's not based on the price of the proportion you're buying.
    • It doesn't need to be your sole deposit money, you can combine it with other savings (see where to save the rest).
    • You're not tied into getting a mortgage from the same bank you open your Help to Buy ISA with. Always check the whole mortgage market before you choose one, our mortgage comparison can help and get the free first-time buyers' mortgage guide too.

  • You CAN rent out your property if you've used a Help to Buy ISA as part of the deposit

    house for rentWhen you use a Help to Buy ISA to buy a home, you sign a declaration saying that you won't rent the property out - the Government's idea is to encourage homeownership, not help people start burgeoning property empires.

    But this was such a restriction, we queried it with the Treasury - what happens if people's circumstances change? For example, if you had a job abroad for a couple of years, but wanted to keep the home and move back in when you came back to the UK - would you have to sell the property?

    The Government saw the sense in the question, and has now partly will be able to rent your property out if your circumstances change down the line.

    However, if you're buying the property with the sole intention to rent it out, this still isn't allowed. If caught, the government would seek to get its bonus money back from you.

    Read full details of our challenge to the Treasury in Martin's can I rent out my home if I used a Help to Buy ISA?

  • You can only open one Help to Buy ISA, but you can transfer it to up the rate

    Unlike a cash ISA – where you can open a new one each tax year – you're only allowed one Help to Buy ISA (ie, from one provider) full stop. But you can continue to add to it each tax year.

    And although you're only allowed to get one Help to Buy account, you can transfer it between different providers to chase the best interest rates.

    So it's important to monitor the interest rate you're getting and, if it drops, find a new Help to Buy ISA provider paying a better rate (you'll need to ask it to transfer your existing one when you open your new account – don't take the money out yourself).

    And of course with the Help to Buy ISA, just like any other ISA, the interest you earn is tax free, so you get to keep all of it.

  • You’re not supposed to contribute to a Help to Buy ISA and a cash ISA in the same year, but…

    junior ISAThe rules say you can’t open a cash ISA and a Help to Buy ISA at the same time in the same tax year. Though nothing prevents you opening a Help to Buy ISA if you have cash ISAs from previous years, or a stocks & shares ISA from any year.

    Yet there is a way round this. Five providers allow ‘split ISAs’ – here they manipulate the rules to put the Help to Buy ISA and a cash ISA together in the same wrapper, effectively allowing you to have both. Remember, your maximum ISA allowance per tax year is £15,240 so your combined ISA savings (the amount you put into an ISA) can't exceed this.

    Doing this is great for those who've already opened a cash ISA this tax year, as you can transfer it in and use some for Help to Buy. If this works for you see the top pick Help to Buy ISA split below.

    The only negative for doing this is you may get lower rates on both your Help to Buy ISA and cash ISA by linking them together. If this isn’t for you it’s worth remembering while a cash ISA lets you save more, getting a Help to Buy ISA still beats it as the 25% state-added bonus is far bigger.

    What should I do if I've already opened a cash ISA?

    I've used my Help to Buy ISA for a home. Can I now open a cash ISA this tax year or do I have to wait until next?

  • You need to get your solicitor to apply for the bonus cash when you buy a home

    When you're ready to buy, to get the bonus, you let your ISA provider know that you’re closing down your Help to Buy ISA account, and transfer the funds into another account (or your solicitor's account). You'll then receive a closing letter from your ISA provider, which you need to give to the solicitor who is doing your conveyancing (house buying) work for you.

    The solicitor then uses the letter to apply online for the government bonus. Beware! Because it's admin work, and takes time, solicitors are allowed to charge up to a maximum of £60 (£50 + VAT).

  • The Help to Buy ISA bonus only helps with the mortgage deposit, NOT the exchange deposit.

    When you're buying a home there are two types of deposit (though the same money's generally used for both). And, as the Government decided you'd only get the Help to Buy ISA bonus at completion (so no one could get it if they pulled out of a property sale), it only helps you with one of these types; and it's important to understand the difference.

    • The Home Exchange Deposit: During the process of buying a property, after your offer is accepted, once you've checked everything out you normally exchange contracts with the seller. At this point the seller will usually ask you to put down a 10% deposit (sometimes it can be negotiated lower to 5%) to secure the property. After that no one else can trump you as both you and the vendor are committed to the sale.

      You then have time to work through your finances and any other issues towards completion which is when you and the mortgage company hand over the remainder of the cash (see Buying a Home Timeline for more).

      While you can use the money you've saved in a Help to Buy ISA towards this exchange, it's only at completion that you receive the mortgage money and Help to Buy ISA bonus; so the bonus won't help towards the home exchange deposit.

      So, if you are relying on the Help to Buy ISA bonus to get you to 10% (or indeed only have a 5% deposit in total), it could be a problem. However, in most cases, it'll be worth trying to negotiate with the seller (probably via your solicitor) on this.

      Be honest with them about the Help to Buy ISA bonus. If the seller wants the sale to go through, they could agree to a lower deposit (possibly with the right to chase you in court for the full 10% if you later pull out).

      But, according to brokers we've spoken to, as long as you are upfront about your reliance on the Help to Buy ISA bonus, it shouldn't be a major issue. Most vendors are unlikely to pull out of a house sale because of a small shortfall which will be made good in just a matter of days when you finally complete.

    • The deposit at completion (sometimes called the mortgage deposit): It is this final deposit when you actually become the legal property owner - not the specific exchange deposit described above - which the Help to Buy ISA bonus is for.

      Say you're buying a £100,000 property, and have saved £8,000 in a Help to Buy ISA; with the bonus you'll have £10,000, so a 10% deposit in total. You’d have been able to use your £8,000 at the exchange stage but can only get the additional £2,000 at this point of completion. That helps to reduce the amount you need to borrow and cuts the cost of your mortgage rate too.

  • You can take the money out whenever you want even if you're not buying a property

    Pound Sign If you decide not to buy your first home (or to buy one costing more than the qualifying amount) you don't lose the money. You can take money out of a Help to Buy ISA whenever you want – you just miss out on the bonus. It'll still be tax-free and you'll still get the interest you're due.

    The rules also allow you to make partial withdrawals, while keeping the Help to Buy ISA open (though withdrawal rules will depend on your provider). You won't be eligible for the bonus on the amount withdrawn, but you can still keep contributing afterwards and will still get the bonus on whatever is in the account when you use it for a deposit.

    It's this fact that makes the accounts such a no-brainer – especially as the Help to Buy ISA rates tend to be higher than normal cash ISAs. So you can put your cash in IN CASE you may buy a home with it, and there's little downside if you don't (barring missing out on the larger tax-free amount you can save in a cash ISA) and a huge upside if you do.

  • It's worth doing even if you're buying soon and have already saved

    The minimum amount you need to get a bonus is £1,600 (you would get £400) and while that takes ‘three months’ to do, in practice you can do it far quicker with most accounts. The reason it’s three months' worth is because you can deposit £1,200 in month one then up to £200 in each subsequent month.

    Yet as a month is a calendar month, in practice you may be able to do this far more quickly, if the dates fall for you.

    For example you could put £1,200 in on 31 January, then £200 in during February, and the final £200 in on 1 March just 30 days later and you’d be ready to go.

    Therefore, assuming you're eligible, even if you have savings elsewhere, if you won't be completing within the next month, it's worth moving what you can into the Help to Buy ISA to get the bonus. Do check that your bank allows this - some have a cut-off date each month for paying in.

  • A new Lifetime ISA launches in April 2017 - but don't wait

    The Lifetime ISA (LISA) is due to launch in April 2017, and just like the Help to Buy ISA, it will give a 25% bonus on top of what you save. It's called a Lifetime ISA as it's designed both to help you buy your first home, and to save for retirement.

    The main difference is that you can save £4,000 a year in a Lifetime ISA, compared with £2,400 (£3,400 in year one) in a Help to Buy ISA. The bonus is also paid differently - with a Lifetime ISA you can get a maximum of £1,000 - 25% of the max £4,000 saving - paid monthly after the first year. So how do the two interact?

    • You can have both Help to Buy ISA and a Lifetime ISA
    • However you can only use the bonus from one of them towards buying a house.
    • Use the LISA for the 25% bonus to buy a home, you won't get the bonus with the Help to Buy ISA, but you can still keep the money plus the interest (and use it towards buying your home).
    • Use the Help to Buy ISA for the 25% bonus, and you'd have to pay a penalty to use your LISA savings for a property, though you would still be able to use it and get the bonus for retirement savings.

    But, it's not worth waiting for the Lifetime ISA to launch, as you can save in the Help to Buy ISA and then merge the two once they launch - then getting the 25% bonus on both. Martin's blogged on how Help to Buy ISAs and Lifetime ISAs compare and how to max gains by timing it right, but here's a quick rundown:

      Lifetime ISA Help to Buy ISA
    How much can you save? £4,000/yr £2,400/yr (£3,400 in year one)
    Can you put lump sums in? Yes No, need to save monthly
    What's the max bonus £32,000 (max contribution over 32 years) £3,000 (max contribution over 4yrs 8mths)
    When's the bonus paid? Annually in 2017/18 tax year; afterwards monthly When you buy a home at completion
    Can you invest as well as save? Yes. With cash & shares LISAs No. Cash only.
    What's the max property price? £450,000 £250,000 (£450k in London)
    When can you buy & get the bonus? After the ISA's been open 12mths Once you've £1,600+ saved
    Who can open it? Anyone aged 18 to 39 Any first-time buyer aged 16+
    Can I withdraw money if not buying a home? Yes, at age 60+, if earlier you don’t get the bonus and will pay a penalty Yes at any time, you just don’t get bonus

    Should I open a Help to Buy ISA or wait for a Lifetime ISA?

  • Where to save for your deposit if you’ve filled your Help to Buy ISA

    We've coloured this number in red as it's not really about Help to Buy ISAs. But, if you've got a lump sum, or you're saving over £200/mth (£400/mth if a couple of first timers buying together), you'll need to save elsewhere too.

    Quite simply, you want to put your cash in the account paying the highest after-tax interest. The new personal savings allowance means basic-rate taxpayers can earn £1,000 interest a year without tax, higher rate £500, so for most people tax is no longer such a big issue on where you save. So here are our top tips:

    • Earn 3% on up to £20,000. Switch bank to Santander 123* and you get 3% AER on balances of £3,000 to £20,000. However, it is to halve the amount of interest paid to 1.5% from 1 November - see Martin's analysis to find out if it's worth ditching. It does charge a £5/mth fee but this is usually covered by the up to 3% cashback you get if you pay bills via it. For smaller amounts, other banks pay more. See Top Interest-Paying Bank Accounts.
    • Top cash ISAs. You can still have past years' cash ISAs with a Help to Buy ISA (see Top ISA Transfers to max the rate). Yet for new money you'll need to use a split ISA like Nationwide's Help to Buy to be able to get a cash ISA too.
    • Get up to 5% with a regular saver. Some bank accounts also offer customers access to linked regular saver accounts where you can put up to £300/mth in with top rates. See Top Regular Savers.

    Have a question we've not answered? Let us know in the Help to Buy ISA forum discussion.

Best BuysHelp to Buy ISAs

Three things you need to know about all the products below:

  • Anyone can open them, you don’t need to bank with that provider.
  • If you get one you don’t need to then get that provider's mortgage.
  • This is still a new product, more deals may launch.

Barclays bank symbol

Top open-to-all Help to Buy ISA rate

Barclays 2.27% AER

Barclays pays the top open-to-all Help to Buy ISA rate at 2.27%, and you can manage the account online (if registered), in branch or by phone. You can open the account with just £1, though as with all other Help to Buy ISAs, you can put up to £1,200 in in the first month.

Like all other Help to Buy ISAs currently on the market, this is a variable rate, meaning you should monitor it in case it drops.

Payments must be received by the end of the calendar month. You can use standing orders, cash/cheque deposit or bank account transfers to fund the ISA.


Rate: 2.27% AER variable | Min deposit: £1 | Access: Online/branch/phone | Interest paid: Monthly | Allows previous ISA transfers? Yes | ISA split allowed? No |
Min age: 16 | Linked account needed? No | Linked benefits? None | Withdrawal penalty: None

Buckinghamshire BS symbol

Next highest Help to Buy ISA rate

Buckinghamshire BS 2.25% AER

Buckinghamshire BS pays the next highest Help to Buy ISA rate that's open to everyone, and you can open it with just £1. You can only open the account by post or in branch so if you want an account with online access, look at the options below.

Like all other Help to Buy ISAs currently on the market, this is a variable rate, meaning you should monitor it in case it drops.

Your initial payment can be made with cash in branch, cheque by post or debit card by phone. Monthly payments after that must be made by standing order between 6th and 20th of every month, or by cheque or cash if in branch.


Rate: 2.25% AER variable | Min deposit: £1 | Access: Post/branch | Interest paid: Annually | Allows previous ISA transfers? Yes | ISA split allowed? No |
Min age: 16 | Linked account needed? No | Linked benefits? None | Withdrawal penalty: None

Nationwide Bank symbol

Top if you also want a cash ISA in the same year

Nationwide* 2% AER

The Nationwide Help to Buy ISA* pays 2%, pretty similar to most other deals. Like Aldermore below, it's one of the few that offers a ‘split ISA’.

Yet it is one of the few that offers a 'split ISA' – for the others doing this see below.

This means it has manipulated the rules to allow you to have a cash ISA alongside a Help to Buy ISA, as it’s all in one wrapper.

So if you’ve already saved in a cash ISA since 6 April 2016 you can transfer it in here, and then move money each month to the Help to Buy ISA, while keeping your cash ISA status. Or, equally, you can open it with new money and save both in the cash ISA and the Help to Buy ISA.

We've put it ahead of the others that allow splits because, even though most have similar Help to Buy ISA rates, Nationwide also has an okay rate on its easy access ISA which pays 0.75% (0.95% if you have a 'Flex' current account).


Rate: 2% AER variable | Min deposit: £1 | Access: Online/branch/phone | Interest paid: On account anniversary| Allows previous ISA transfers? Yes | ISA split allowed? Yes
| Min age: 16 | Linked account needed? No | Linked benefits? Access 'Save to Buy' mortgages | Withdrawal penalty: None

Aldermore Bank symbol

Decent alternative to Nationwide

Aldermore 1.75% AER

The Aldermore Help to Buy ISA pays 1.75%, just a little lower than most other deals. Like Nationwide above, it's one of the few that offers a ‘split ISA’.

We've put it ahead some of the others that allow splits because, even though it has a slightly lower Help to Buy ISA rate, Aldermore has the best cash ISA rates of the five. Its 30-Day Notice Cash ISA pays 0.8% (unlimited withdrawals but you must give 30 days' notice each time you wish to make one).


Rate: 1.75% AER variable | Min deposit: £1 | Access: Online/post/phone | Interest paid: Monthly/annually| Allows previous ISA transfers? Yes | ISA split allowed? Yes
| Min age: 16 | Linked account needed? No | Linked benefits? None | Withdrawal penalty: None

Other providers offering Help to Buy ISAs

There are few circumstances we can think of where these deals beat the ones above – but you’ve asked for a full list, so here it is:

Straight Help to Buy ISAs

Split ISAs – so you can get Help to Buy ISA & cash ISA together

  • NatWest – 2% AER variable on Help to Buy, 0.25% on easy access cash ISA (0.01% from 31 Oct)
  • Ulster Bank – 2% AER variable on Help to Buy, 0.5% on easy access cash ISA (0.05% from 21 Dec)
  • Newcastle Building Society – 1.25% AER variable on Help to Buy, 0.8% on easy access ISA

Help to Buy ISAs that have restrictions on who can open them

  • Penrith BS – pays 3% AER variable (only available to people who live in Cumbria)
  • Tipton BS – pays 3% AER variable (2.75% from 1 Nov; only available if you live in B, DY, WS or WV postcode areas, or if you had a savings account with Tipton before 23 May 2016)
  • Cumberland Building Society - pays 2.75% AER variable (access is branch-only; branches are in Cumbria, Lancashire & Southern Scotland)
  • Darlington Building Society - pays 2.55% AER variable (access is branch-only; branches are in and around County Durham and Teesside)
  • Vernon Building Society - pays 2.1% AER variable (only available if you live within 25 miles of Stockport)
  • Progressive Building Society - pays 2% AER variable (only available if you live in Northern Ireland)
  • Monmouthshire Building Society - pays 1.85% AER variable (only available to existing customers, or those living in certain postcodes around Monmouthshire)

Rather watch than read? Martin Lewis Help to Buy ISA video briefing

Some people find it easier to watch than read – if that's you, here's a quick video to help you understand Help to Buy ISAs.