Help to buy ISAS Are they Still worth It? It’s been revealed that first time buyers can’t use the 25% bonus on an initial home deposit – so are these ISAS really any good?

Help to Buy ISAS were launched in December 2015 to give 1,000s of first time buyers the chance to get on the property ladder. But in August it emerged you can’t use them for the initial deposit. we look at what this means and if they’re worth it…

How Do they work?

First time buyers can save cash in a Help to Buy Isa and the Government will pay them a bonus when they buy a house. You’ll get £50 for every £200 you save – up to a bonus of £3,000. Then you can put the money towards a home that costs less than £250,000 (or £450,000 in London).

Great, So WHAT’S the problem?

well, the Government will only pay the bonus once the house sale has been completed. This means you can’t use the bonus for your initial deposit (although, you can use the cash you’ve saved).

WHAT’S An INITIAL Deposit?

when you buy a house you pay an ‘initial deposit’ at the point you exchange contracts. This is usually about 10% of the property value – as a guarantee that you’ll buy it.

So, when CAN you use the Bonus?

once you’ve exchanged contracts, the next stage is completion. This is usually four weeks later. It’s when the remaining money owed to buy the property is transferred from your solicitor’s account to the seller’s account. at this point your solicitor will apply for the Government bonus – remember it’s a max of £3,000. This can only be used towards your ‘mortgage deposit’, which is paid on completion.

IS A Help to Buy ISA Still worth It?

Yes, definitely. It’s free cash. although, it only benefits those who have secured a mortgage with a deposit of more than 10%. If you haven’t saved up the full 10% you might be scraping around for the cash to pay the initial deposit. There is a petition asking that this is changed so the bonus can be used for the first part of the deposit. see petition. parliament.uk/petitions/165376.