And access the £3k bonus?
The Help to Buy ISA was launched in December 2015 to help first time buyers save a deposit. What about those first-time-buyers who have already saved a substantial amount towards their deposit and are looking to purchase in 2016? Is there a way they can get their hands on the £3k bonus too?
This does not constitute advice and advice should be sought in all instances before acting on it.
Strict regulations for the Help to Buy ISA
The Help-to-Buy ISA is considered a great initiative by the government to help young people onto the property ladder, by contributing towards their deposit.
However, it leaves a sour taste in the mouth of those who have already been saving-up for many years and who now would also like a piece of the pie.
The Help-to-Buy ISA stipulates that a maximum of £1,000 can be contributed to set up the ISA, followed by monthly instalments of a maximum of £200.
The government contribute 25% to the overall sum at the time of house purchase, so in order to achieve the full £3k contribution, it takes 4.5 years, paying in the maximum amounts.
Can those with existing savings get any government help?
In short, yes. Whilst there is unfortunately no short-cut to the full £3k bonus pot, the best those who are looking to purchase in the near future can do, is to invest £1,000 of their existing savings into the Help-to-Buy ISA now, plus, pay the maximum instalments of £200 until the house purchase takes place.
There is a minimum of £1,600 Help-to-Buy ISA savings required to qualify for the 25% contribution. This can be achieved in 3 months, gaining £400 extra from the government, or £550 in 6 months or £850 in one year. This is per ISA account, so if a couple have been saving, and are buying jointly, the best thing is to open two Help-to-Buy ISA’s and get double the bonuses.
So, for those who are on the verge of house purchase in 2016, there is still some room to gain a proportion of the Help-to-Buy bonus, although the full bonus will sadly take the full time commitment.
Dental & Medical Financial Services can advice you on the best Help-to-Buy ISA on the market, and work with you to ensure you are paying in the monthly instalments.