A Guide to the Government's Help to Buy Scheme

If you're thinking of buying your first home, you'll be delighted to know that the government's Help to Buy: ISA scheme can help you too, by offering a tax-free bonus of up to £3,000 on your savings! At Newcastle Building Society we offer a Help to Buy: ISA for first time buyers, and below we'll answer the questions you are likely to have about this savings account, including the rules, limits, and who is eligible to save.

What is a Help to Buy: ISA?

When you've decided that you want to get onto the property ladder, the Help to Buy: ISA from the Newcastle will help you to take the first step! The Help to Buy: ISA is a type of cash ISA (Individual Savings Account) designed exclusively for first time buyers, as you'll receive a tax-free 25% bonus (of up to £3,000) from the government on your savings when you buy your first home.

Who is eligible for a Help to Buy: ISA?

Anyone who is over the age of 16, and thinking of buying their first home, can have a Help to Buy: ISA.

As long as you have never previously owned or part-owned a home in the UK or elsewhere, you'll fit the eligibility criteria for a Help to Buy ISA.

What are the savings limits for a Help to Buy: ISA?

When you open your Help to Buy: ISA, you'll be able to save up to £1,200 in your first month, and up to £200 in each month after that. The maximum savings amount on which you'll receive the 25% bonus is £12,000. To receive a bonus on the savings in your Help to Buy: ISA, you must have saved a minimum of £1,600 into your account.

You don't have to save the full amount each month, but it's important to remember that if you miss a month of saving, or don't save the full amount in a particular month, you can't add more than £200 the next month. Help to Buy: ISAs are for individual savers, so you won't be able to share an account - however, if you're buying with another person who is also a first-time buyer, they'll be able to open a Help to Buy: ISA of their own too. So the good news is that you could receive a total government bonus of up to £6,000!

When will I get the bonus on my Help to Buy: ISA savings?

When you are approaching completion on the purchase of your first home, you must instruct your solicitor or conveyancer to apply for your bonus on your behalf. When this is received, it will be added to the money you're putting towards your first home when the transaction completes. You can't use your bonus for the deposit that's due at the exchange of contracts, or to pay for solicitor fees, estate agent fees, or any other costs of buying your first home.

Can I have a Help to Buy: ISA with another Cash ISA?

Thanks to our unique CustomISA service, you can open a Help to Buy: ISA alongside one or more other types of Cash ISA, and spread your annual tax-free ISA allowance (£20,000 in the 2017/2018 tax year) across your accounts. For example, a future first time buyer with Newcastle Building Society could open a Help to Buy: ISA alongside our Newcastle First Home ISA - which offers a cash bonus of up to £1,000, when you complete on a mortgage with Newcastle Building Society, meaning that you could receive a total bonus of up to £4,000 towards the costs of buying your first home!

How long are Help to Buy: ISAs available for?

Government Help to Buy: ISAs will be available to new savers until 30th November 2019. It won't be possible to open a new account after that date, but you can keep saving into an existing account. All bonuses on Help to Buy: ISAs must be claimed by 1st December 2030.

So even if you're not thinking of buying your first home any time soon, it could be worth opening a Help to Buy: ISA with us now, so you can start saving whenever you're ready.

You can apply to open a Help to Buy: ISA with Newcastle Building Society in branch, by post, or online by following the 'Apply Online' link at the bottom of the Help to Buy: ISA information page. Should you have any more questions about Help to Buy: ISAs that we haven't answered above, or any of our savings accounts, our Savings team would be pleased to discuss these with you. You can call us 0345 734 4345, or book an appointment at your local branch to chat at a time that suits you