Help to buy and the new ISA
One of the most important aspects of the Help To Buy ISA is that it allows you to save up to £1,200 in the initial month and then up to £200 every month after that. If you don’t have the money to reach the maximum amount of funding every month, it is still a very good way to save money and contribute. If you are unable to reach the maximum payment for a month, it is not possible to top up the following month; you are still set by the upper limit each time, regardless of the previous month payments. It is also possible to miss a contribution.
The 25% added bonus is the real reason to consider the Help To Buy ISA
For many people, the real benefit that comes with using the Help To Buy ISA comes with the fact that there is 25% added, tax-free, to whatever total is in your ISA account when you are looking to buy. For first-time buyers, this is a very simple benefit that can make all the difference. The minimum level required to get the bonus is £1,600 which provides you with a £400 bonus, taking you to £2,000. The maximum level to receive a bonus is £12,000 which provides a bonus of £3,000 which will see you having a total of £15,000 to use as your deposit.
Given that the bonus scheme is scheduled to run until December 2030, it is well worth investing now, even if you can only pay a small amount of money each month. However, there is a risk that future governments may change the rules associated with the ISA, but this isn’t something that is regarded as likely at the moment.
Make sure that you eligible to take out the Help To Buy ISA
The scheme is open to people who have never owned an interest in a residential property, anywhere around the world. This ruling includes people who have inherited a property. This means that it is strictly aimed at first-time buyers and the window to open the Help To Buy ISA runs between 1st December 2015 and 1st December 2019, but this bonus can be applied until 2030.
The Help To Buy ISA can be used for any property which costs no more than £250,000 or no more than £450,000 in the London area. The Help To Buy ISA can only be applied with a residential mortgage.
It is only possible to open up the one Help To Buy ISA but it is possible to transfer funds between different providers if you are looking to receive and enjoy the very best interest rates. This means that there is a lot to be said for monitoring interest rates on offer and if you can enhance your return by transferring the ISA, you should consider this. There may be other factors involved with transferring an ISA, so be sure to check out the terms and conditions, but it pays to be proactive.
It is also important to bear in mind that the Help To Buy ISA, like any ISA, provides interest on a tax free basis.