Help to Buy ISAs
Now closed for newbies – need-to-knows if you’ve already got one
Help to Buy ISAs are no longer available to new applicants. Missed the opportunity? You might consider a Lifetime ISA, which also provides a 25% bonus for first-time homebuyers. However, if you already have a Help to Buy ISA, here’s all the essential information you need, including how to claim the 25% bonus, the potential benefits of switching to a Lifetime ISA, and how to secure a better interest rate by switching providers.
Top Help to Buy ISAs for transfers
Other top ISA and mortgage guides…
Lifetime ISA: The Help to Buy ISA’s successor scheme
Cash ISAs: The top-paying cash ISAs.
Mortgages for first-time buyers: Free downloadable booklet.
Boost your credit score: Tips to boost your creditworthiness.
What is a Help to Buy ISA?
Help to Buy ISAs are no longer available for new sign-ups. However, if you already have one, you can save up to £200 each month towards purchasing your first home, with the government contributing a 25% bonus (up to £3,000) on your savings. Additionally, you’ll earn interest on your savings, and since it’s an ISA, this interest is tax-free.
Keep in mind that the bonus is only awarded when the funds from your Help to Buy ISA are used as a deposit on your first home. The process can be a bit complicated, so be sure to review our essential information if you’re nearing the point of using your Help to Buy ISA savings to buy a property.
The 12 Help to Buy ISA need-to-knows
Here’s our full info on how to use your Help to Buy ISA for a home, and whether it’s worth transferring it to a Lifetime ISA.
1 – You can keep saving up to £200/mth until 30 November 2029
You can deposit up to £200 monthly into your Help to Buy ISA. If you have less to contribute, you can deposit a smaller amount. Missing a payment one month isn’t an issue, but you won’t be able to make up for it the following month (you’ll still be limited to a £200 deposit in the next month).
Although the deadline to open a Help to Buy ISA has expired, those who already have one can continue saving until 30 November 2029. After that, you have until 1 December 2030 to claim the 25% government bonus.
Are my savings safe in a Help to Buy ISA?
Help to Buy ISAs are savings accounts, so they carry no investment risk. The primary concern would be the unlikely event of the bank or building society going under. However, all the providers we recommend are protected by the UK’s £85,000 savings guarantee, which includes Help to Buy ISAs.
One point to be cautious of is that this protection applies per banking institution, not per individual account. Therefore, if you have other savings with the same bank as your Help to Buy ISA, your total savings could exceed the protection limit, especially if you have a substantial amount saved. For more details, check our Savings Safety guide.
2 – The state adds 25% tax free to whatever is in the ISA when you use it to buy a home, up to a max £3,000 bonus
If you’re a first-time homebuyer, prioritizing a Help to Buy ISA (or Lifetime ISA) for saving your deposit is a smart move, even with the personal savings allowance in place.
When you eventually use your Help to Buy ISA funds to purchase your first home, a 25% bonus will be added to all your savings and interest, with two conditions:
- You must have saved at least £1,600 to receive any bonus, which would amount to an extra £400.
- The maximum bonus applies to £12,000 in savings, giving you up to £3,000. If you save more than £12,000, you can continue using the ISA, but the bonus will be capped at £3,000.
How much state top-up you’ll get
| AMOUNT IN HELP TO BUY ISA | BONUS ADDED |
| £1,600 (the minimum to get bonus) | £400 |
| £3,000 | £750 |
| £5,000 | £1,250 |
| £8,000 | £2,000 |
| £10,000 | £2,500 |
| £12,000 | £3,000 |
The bonus scheme’s set to keep paying out on Help to Buy ISA savings until 1 December 2030. So you could put in just a small amount a month and take years to build up your bonus. However, you risk a future Government changing the rules before 2030, meaning it’ll stop paying bonuses.
3 – Buying with another first-time buyer? You can join bonuses
If you and your partner both have a Help to Buy ISA, you can collectively save up to £400 per month by contributing to both ISAs. When it’s time to purchase your property, you’ll be able to combine and double your bonus.
Likewise, if your partner has a Lifetime ISA, both of you can take advantage of the bonuses when making your purchase.
4 – The Help to Buy ISA can be used for any property costing £250,000 or under (£450,000 in London)
The bonus applies exclusively to homes purchased for £250,000 or less, or up to £450,000 in London, which includes both inner and outer London boroughs. Unlike certain other Government initiatives, this scheme isn’t limited to new builds; it can be used for any property, as long as you’re securing the purchase with a mortgage. If you’re buying the property with cash, you won’t be eligible for the bonus.
- This can be used with any type of residential mortgage, not just a Help to Buy equity loan (although that’s an option). It includes self-build and shared ownership mortgages but excludes buy-to-let mortgages.
- For shared ownership, the bonus applies only if the total property price is £250,000 or less (£450,000 in London). The limit is based on the property’s full price, not just the portion you’re purchasing.
- The property price cap is fixed – it doesn’t increase if you’re buying with someone else who also has a Help to Buy ISA.
- You can combine this with other savings, so it doesn’t have to be your only deposit source (see where to save the rest).
- You’re not required to get a mortgage from the same provider as your Help to Buy ISA. It’s crucial to explore the entire mortgage market before making a decision. Our Mortgage Comparison tool and the Free First-Time Buyers’ Mortgage Guide can assist with this.
- While you don’t need to be on the mortgage to use your bonus, you must be listed on the property’s title deed. However, some lenders may require everyone on the title deed to also be on the mortgage.
5 – The Help to Buy ISA bonus only helps with the mortgage deposit, not the deposit you send to the buyer at exchange
When purchasing a home, there are two kinds of deposits involved (although typically, the same funds are used for both). The Government determined that the Help to Buy ISA bonus is only available upon completion (to prevent people from claiming it if they withdraw from a property sale), meaning it only supports one of these deposit types. Therefore, understanding the distinction between the two is crucial.
- The home exchange deposit: When purchasing a property, once your offer is accepted and you’ve conducted all necessary checks, the next step is typically exchanging contracts with the seller. At this stage, the seller generally requires you to pay a deposit of 10% (though it may be negotiated down to 5%) to secure the property. This exchange of contracts ensures that both you and the seller are legally committed to the sale, preventing others from outbidding you.
Afterward, you’ll have time to finalize your finances and address any remaining issues before completion, when the remaining funds, including your mortgage, are transferred (see the Buying a Home Timeline for more details).
You can use the funds accumulated in a Help to Buy ISA for your property purchase, but keep in mind that the actual mortgage funds and the Help to Buy ISA bonus are only disbursed at the completion of the transaction. Therefore, the bonus won’t assist with the deposit needed for the home exchange.
If you’re counting on the Help to Buy ISA bonus to make up the 10% deposit (or if your total deposit is just 5%), this could pose a challenge. However, it’s generally advisable to attempt negotiating with the seller—likely through your solicitor—under these circumstances.
Be transparent about your dependence on the Help to Buy ISA bonus. If the seller is motivated to proceed with the sale, they may agree to a reduced deposit, possibly with a provision to pursue the full 10% through legal means if you back out later.
According to brokers we’ve consulted, as long as you’re open about relying on the Help to Buy ISA bonus, it shouldn’t be a significant issue. Most sellers are unlikely to cancel the sale over a minor shortfall that will be resolved shortly after completion.
- The deposit at completion (sometimes called the mortgage deposit): The Help to Buy ISA bonus applies to the final deposit when you officially become the owner of the property, not the initial exchange deposit mentioned earlier.
For instance, if you’re purchasing a property worth £100,000 and have accumulated £8,000 in a Help to Buy ISA, the bonus will increase your total savings to £10,000, achieving a 10% deposit overall. While the £8,000 can be used at the exchange stage, the additional £2,000 from the bonus is only available at the completion stage. This helps lower the amount you need to borrow and can reduce your mortgage costs.
6 – You need to get your solicitor to apply for the bonus when you buy a home
When you’re prepared to proceed with your home purchase and claim your bonus, inform your ISA provider that you wish to close your Help to Buy ISA account and transfer the funds to either another account or your solicitor’s account. Following this, you’ll receive a closure letter from your ISA provider, which must be provided to your conveyancing solicitor.
The solicitor will then use this letter to apply for the Government bonus online during the period between exchanging contracts and completing the purchase of your home. Be cautious: since this involves administrative work that takes time, solicitors are permitted to charge a fee of up to £60 (£50 plus VAT).
7 – You can rent out your property if you’ve used a Help to Buy ISA as part of the deposit
When utilizing a Help to Buy ISA to purchase a home, you agree to a declaration stating that the property cannot be rented out. This stipulation is designed by the Government to promote homeownership rather than assist individuals in expanding property investments.
However, this restriction raised concerns, so we reached out to the Treasury for clarification on how changing circumstances might affect this rule. For instance, if you were to take a job overseas for a few years and intended to return to live in the home upon your return to the UK, would you be required to sell the property?
The Government recognized the validity of this concern and has partially adjusted the policy. You can now rent out your property if your situation changes in the future.
Nonetheless, if you purchase the property with the primary aim of renting it out, this is still prohibited. Should you be found in violation of this rule, the Government will seek to reclaim any bonus funds you received.
8 – You can transfer your Help to Buy ISA to a different provider to up the rate
Although most providers have phased out their Help to Buy ISAs, a handful still accept transfers for those who already hold an account.
To ensure you’re getting the best deal, it’s crucial to compare your current rate with offers from other providers. The highest-yielding accounts are listed below.
Important: When opening a new account, make sure to request a transfer of your existing Help to Buy ISA through the new provider—avoid withdrawing the funds yourself.
9 – You can pay in to other cash ISAs in the same year as you’ve paid in to a Help to Buy ISA
With the update to ISA regulations in April 2024, you’re now allowed to contribute to several cash ISAs within a single tax year. This change is particularly beneficial if you have a Help to Buy ISA, as it qualifies as a cash ISA.
Keep in mind that your total ISA allowance for each tax year remains £20,000, so you can’t exceed this amount across all your ISA contributions for the year.
10 – It could be worth transferring your Help to Buy ISA to a Lifetime ISA if you won’t be buying for a year or more
Similar to the Help to Buy ISA, the Lifetime ISA (LISA) offers a 25% bonus when the funds are used for purchasing your first home. If you are between 18 and 39 years old, you have the option to open a LISA alongside your Help to Buy ISA. However, it’s important to note that you can only apply the bonus from one of these accounts towards buying a property.
Therefore, unless you intend to use the LISA and its bonus for retirement purposes, you need to decide whether to retain your Help to Buy ISA or to switch it over to a LISA.
To simplify, here are three key advantages of a Lifetime ISA (LISA) compared to a Help to Buy ISA:
• With a LISA, you can contribute up to £4,000 annually, doubling the £2,400 annual limit of a Help to Buy ISA. This means you’ll accumulate savings and earn your bonus more rapidly with a LISA.
• If you save more than £12,000, you’ll benefit from a higher bonus with a LISA. The Help to Buy ISA offers a maximum bonus of £3,000 for £12,000 saved, whereas the LISA provides a maximum bonus of £33,000 if you save £4,000 annually from ages 18 to 49, with no cap on the total bonus.
• A LISA allows you to purchase a home worth up to £450,000 anywhere in the UK, whereas the Help to Buy ISA limits you to properties priced up to £250,000, or £450,000 in London. The LISA offers a uniform £450,000 limit across the country.
There are a few potential disadvantages to consider if you’re thinking about transitioning from your Help to Buy ISA:
- A Lifetime ISA (LISA) must be open for at least a year before you can use it to purchase your first home. If you haven’t yet opened a LISA and plan to buy within the next year, it may be better to stay with your current Help to Buy ISA.
- Withdrawing money from a LISA incurs a 25% penalty unless it’s for your first home or retirement. This is different from the Help to Buy ISA, where you can access your funds at any time without a penalty (although without the bonus). The LISA’s penalty means you would forfeit around 6% of your savings if you need to withdraw early. If you’re unsure about buying a home, sticking with the Help to Buy ISA might be the safer choice.
- If you have saved more than £4,000 in your Help to Buy ISA, you will need to wait until the new tax year to transfer the excess amount. Transfers from a Help to Buy ISA to a LISA count towards the £4,000 annual LISA contribution limit. Therefore, if your savings exceed £4,000, you must wait until after 6 April (the beginning of the new tax year) to move any additional funds.
For instance, if you have £12,000 in your Help to Buy ISA, it will take three tax years to transfer it all to a LISA, equating to at least one year and two days, to match your current savings status.
This timing is crucial because if you plan to purchase a home while having funds in both accounts, you might forfeit the bonus on one portion of your savings. Thus, if you intend to transfer, ensure you have sufficient time before your purchase to complete the transfer. Otherwise, it might be best to remain with the Help to Buy ISA.
Lifetime ISAs vs Help to Buy ISAs – which wins?
| LIFETIME ISA (FOR HOME PURCHASE) | HELP TO BUY ISA | |
| Max contribution? | £4,000/year | £2,400/year (£3,400 in year one) |
| Lump sums? | Yes | No, need to save monthly |
| Max bonus? | £33,000 (assumes max contribution every year from age 18-49) | £3,000 (assumes max contribution over four years and eight months) |
| When’s the bonus paid? | Monthly | On completion when you buy a home |
| Investment option too? | Yes, via stocks & shares LISAs | No. Cash savings only |
| Max property price? | £450,000 | £250,000 (£450,000 in London) |
| How quickly can you use it? | After the LISA’s been open 12mths | Once you’ve £1,600+ saved (can be done in min 3mths) |
| Who can open it? | Anyone aged 18 to 39 | No one – they’re closed to new applicants |
| What can it be used for? | The home deposit and mortgage deposit | Just the mortgage deposit |
| Can I withdraw money if not buying a home? | Yes, at age 60+; if earlier you don’t get the bonus and will pay a penalty | Yes, at any time, you just don’t get the bonus |
How to transfer your Help to Buy ISA savings into a Lifetime ISA
If you have a LISA that could benefit you, simply open one (refer to the top-paying options) and transfer your funds. Remember, you can only move a maximum of £4,000 this tax year (or less if you’ve already contributed to the LISA) because any funds moved from a Help to Buy ISA to a LISA will count towards this limit. Here’s the process for transferring your money:
• When applying for a LISA with a provider that permits transfers from a Help to Buy ISA, complete their transfer form during your application. This will ensure that your total ISA limit of £20,000 remains unaffected. Transfers typically take between two to four weeks to process.
• If the provider does not accept transfers, you’ll need to withdraw the funds from your Help to Buy ISA. While it’s ideal to find a provider that accepts incoming transfers, if you choose one that doesn’t, you’ll need to withdraw the money and deposit it into your LISA yourself.
Keep in mind that this approach will reduce your £20,000 ISA limit for the tax year in which you make the deposit. However, if you’re not planning to use the full limit, this reduction may not be a significant issue.
If your Help to Buy ISA (H2B ISA) balance exceeds £4,000, you’ll need to transfer £4,000 immediately and request to transfer the remaining amount when the new tax year begins. Be aware that some H2B ISA providers might close your account when you withdraw a portion of the funds. If this happens, you’ll need to close the account, withdraw the funds, and temporarily save them in another account (refer to top savings options) until you’re ready to deposit them into a Lifetime ISA (LISA).
11 – If you’ve filled your Help to Buy ISA, use other accounts for additional savings
This discussion isn’t directly related to Help to Buy ISAs, but if you have a significant amount of money or are saving more than £200 per month (£400 per month if you and your partner are first-time buyers), you’ll need to consider other savings options as well.
In essence, you should aim to place your funds in an account that offers the highest after-tax interest rate. Due to the personal savings allowance, basic-rate taxpayers can earn up to £1,000 in interest annually without paying tax, while higher-rate taxpayers can earn £500. For most people, the impact of taxes on where you choose to save has become less of a concern.
See Top Savings Accounts for the best rates currently available.
12 – You can take the money out whenever you want, even if you’re not buying a property – but you won’t get the bonus
If you choose not to purchase your first home (or if you buy one that exceeds the qualifying amount), you won’t forfeit the funds in your Help to Buy ISA. You can withdraw cash at any time, but you’ll forgo the bonus. The money will remain tax-free and you’ll continue to earn interest.
Additionally, the rules permit partial withdrawals while keeping your Help to Buy ISA active (note that specific withdrawal policies may vary by provider). Although you won’t receive a bonus on the withdrawn amount, you can continue to contribute to the ISA. You’ll still be eligible for the bonus on the remaining balance when it’s used for a home deposit.
Top picks: Help to Buy ISAs for transfers
Since the Help to Buy ISAs ceased accepting new applications in 2019, the available options have diminished and interest rates have decreased. If you currently hold a Help to Buy ISA, compare your current rate with those offered by other accounts to determine if switching could offer you better returns.
Additionally, consider transferring your funds to a Lifetime ISA. This type of account allows for larger contributions and could potentially provide a more substantial bonus (refer to the comparison between Help to Buy ISAs and Lifetime ISAs).
Keep in mind that having a Help to Buy ISA with a particular provider does not obligate you to use their mortgage services. For instance, if you have a Help to Buy ISA with Halifax, you are not required to take out a mortgage from Halifax.
Top Help to Buy ISAs
HSBC – 3.5% (existing customers only)
Halifax / Bank of Scotland / Lloyds Bank – 2.75%
| Provider | Rate (AER variable) | How to transfer | How to manage | Interest paid |
| HSBC Existing customers with a current account, Flexible Saver or Premier Savings only |
3.5% up to £12,000
(2% above) |
Complete a transfer form and take it to a branch or post it | Online/ app/ phone/ branch | Monthly |
| Halifax | 2.9% up to £12,000
(1.45% above) |
Call Halifax to start transfer | Online/ app/ phone/ branch | Annually |
| Bank of Scotland | 2.9% up to £12,000
(1.45% above) |
Call Bank of Scotland to start transfer | Online/ app/ phone/ branch | Annually |
| Lloyds Bank | 2.9% up to £12,000
(1.4% above) |
Call Lloyds Bank to start transfer | Online/ app/ phone/ branch | Annually |