Help to Buy ISA deals revealed
Three of the country’s largest financial organisations have announced their Help to Buy ISA rates, in advance of tomorrow’s launch.
The Help to Buy ISA enables first-time buyers to save for a deposit, with the Government topping up their pot to help them onto the ladder.
Providers had been reticent about announcing their deals up until this weekend, but now NatWest, Nationwide and Halifax have all released details of their Help to Buy products. And the rates are attractive when compared to standard ISAs.
NatWest is offering 2% interest, as is Nationwide, which is also offering cashback if you go on to take out a mortgage with them.
But it’s Halifax that has grabbed the headlines this weekend, offering 4% interest on its Help to Buy ISA, which will launch tomorrow.
How does it work?
Under the Government scheme, deposits are limited to £200 per month, although in month one you can put in an extra £1,000 to kick off your savings. You earn interest on the money you save at the rate payable by your provider, and there are likely to be a few more announcing deals in the next day or two.
The Government will then add 25% to the closing balance of the account up to a maximum of £3,000 (£400 minimum).
The Government bonus is paid directly to your conveyancer or solicitor when the account is closed, so you don’t get the cash yourself, but it does go towards your deposit.
According to research from Halifax, the launch of Help to Buy ISA comes at a time when over half (52%) of would-be first-time buyers cite the size of deposit required as preventing them from purchasing a property, although almost a third (29%) are confident they will be able to buy their own home at some point in the future.
Giles Martin, head of Halifax Savings said: “It is clear from our research that while some people are still worried about the challenge of saving for a deposit, many see the new Help to Buy ISA as a genuine solution, with half of prospective first-time buyers intending to open an account. For those looking for an incentive to save regularly, opening this account, with a 4% interest rate from Halifax and a 25% Government bonus, will make what they do save work much harder for them.”