Halifax slashes Help to Buy ISA rate for new customers

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 4% interest tax-free and then the state will add 25% free cash to help you buy a property – up to £3,000 in total.

Until today, Halifax's Help to Buy ISA paid the joint top rate of 4% tax-free, along with Santander. For more on how the Help to Buy ISA works, plus how the top picks now stack up, see our Help to Buy ISAs guide.

I've already taken out a Halifax Help to Buy ISA with an interest rate of 4% – how does this affect me?

In short, it doesn't. Halifax has confirmed that existing customers are not affected and will continue to earn 4% interest.

Has anything else changed, other than a lower interest rate for new customers?

No. One quirk of the Halifax Help to Buy ISA that remains is that to make the initial £1,200 deposit, you can pay the usual up to £200 per month in month one, and then you've 21 days from account opening to pay in the extra £1,000.

The minimum deposit remains at £1 and access is still available online, in branch or over the phone.

Why has Halifax cut the interest rate?

A Halifax spokesperson told us the bank had arrived at the decision to "align with the rest of the market".

What are the best value ISAs currently available?

We believe the following Help to Buy ISAs are currently the best available:

• Santander is now the only company to offer the top rate of 4% on its Help to Buy ISA, and it's fairly flexible in how you can pay in to it.

• Virgin Money pays the next best rate of 3% and you can open it online.

• The Aldermore Help to Buy ISA pays 2%, yet it's one of few that offers a 'split ISA', so you can get a Help to Buy ISA and cash ISA together.

• The Nationwide Help to Buy ISA also pays 2%, and offers a 'split ISA' too.

See the Help to Buy ISAs guide for more info.