Money Advice Service

Help to Buy ISAs are a tempting proposition for first-time buyers, but how do they work? We’ve pulled together some of the most common questions, including who can get one and how much you can save.

Can I get a Help to Buy ISA?

If you’re over 16, a UK resident and a first-time buyer you are eligible for a Help to Buy ISA.

A first-time buyer is someone who does not own, and has never owned, a home in the UK or elsewhere.

How does a Help to Buy ISA work?

The big advantage to having a Help to Buy ISA is the government tops up your savings by 25%. So, if you save up £200, the government will add £50.

You can only use your Help to Buy ISA to purchase a home worth a maximum of £250,000, or £450,000 in London.

Can I put my Help to Buy ISA towards my mortgage deposit?

Yes - but you can’t put it towards your exchange deposit.

When you exchange contracts with the seller, they can ask you to pay an exchange deposit, also known as a holding or contract deposit. You can’t use your bonus towards this as the government only pays out the bonus once the property sale is completed.

But you can use the bonus to reduce the size of your mortgage by adding it to your mortgage deposit.

Your lender receives the government bonus after your home purchase is completed, and the bonus will then be added to the mortgage deposit - the money you are contributing towards the purchase of your home. This will reduce the size of your mortgage.

The lender might ask you to provide evidence of any money saved within your ISA when you apply for your mortgage. This is to help them work out how much you need to borrow.


If you save up £12,000 with a Help to Buy ISA, you are entitled to a £3,000 bonus.

However, you won’t be able to use this bonus as part of your initial exchange deposit.

The bonus will go towards the full cost of your home after the sale is completed.

This means your outstanding mortgage will be reduced by £3,000.

If you’re not sure of the difference between exchange and completion, read our guide ‘Contract exchange and completion when buying a home’.

I want to buy with my partner. Can we both get a Help to Buy ISA?

As long as each of you is over 16 and both of you are first-time buyers, you can both have your own, separate Help to Buy ISA.

My partner and I are both first-time buyers and want to purchase a property together. Does the property value allocation double as there are two people?

No, the limit of £250,000, or £450,000 in London, still applies.

Is there a maximum/minimum amount I have to save in a Help to Buy ISA?

The maximum amount you can save in a Help to Buy ISA is £12,000.

This means you’d get a £3,000 top-up from the government.

The minimum amount you must have saved to take advantage of a Help to Buy ISA is £1,600. This would give you a £400 top up.

How much can I save each year?

You can save up to £200 a month and deposit a lump sum up to £1,200 in your first month.

Although this is much less than the Cash ISA limit (£20,000 for 2018-19), the 25% top-up the government will give you mean it’s a worthwhile investment for many first-time buyers.

What if I already have a cash ISA?

You can put money in both a cash ISA and Help to Buy ISA in the same tax year, but you will have to take some extra steps.

  • If you paid into your cash ISA after 5 April 2018, you need to transfer your active cash ISA to your new Help to Buy ISA. You can transfer a maximum of £1,200 from your active cash ISA to the Help to Buy ISA and will need to transfer any additional amount to a stocks and shares ISA or a non-ISA account.
  • Alternatively, some providers will let you save into a cash ISA and a Help to Buy ISA within the same ISA wrapper. However, the standard cash ISA and Help to Buy ISA allowance limits will still apply.

When can I access the money?

You can withdraw money from your Help to Buy ISA account at any time.

The minimum government bonus is £400, so you need to save at least £1,600 before you can claim your bonus.

What if I change my mind and decide not to buy a property?

You will not be able to claim your government bonus.

Can I rent out the property I buy?

No. If you want to take advantage of Help to Buy, you cannot subsequently let out the property or use it as a holiday home.

If I take advantage of the scheme and buy a home, which I later rent out, what happens to the top up I got towards the purchase?

To qualify for the government bonus, the property you are buying must not be rented out after you buy it.

How long do I have to apply for a Help to Buy ISA?

The ISAs are available to 30 November 2019.

If you open your account before the end date, you have until 1 December 2030 to claim your government top up.

Do I have to be employed or paying income tax to apply for a Help to Buy ISA?

No. As long as you meet the required conditions (see ‘Can I get a Help to Buy ISA’, above), you’re eligible.

Can I apply for a Help to Buy ISA if I’m in debt?

Yes, but your name will have to be on the Title Deed of the property and you will be assessed under the lender’s affordability criteria when applying for a mortgage.

What if I change my mind and decide not to go through with buying a home?

If you change your mind after claiming the bonus, your solicitor or conveyancer will return your bonus to the government and give you a document known as a ‘purchase failure notification’.

You then have the option to re-open your Help to Buy ISA and use it to buy a different home or deposit the money you had in it into a cash or stocks and shares ISA.

This will not count towards your annual ISA subscription limit.

However, if you do put your money into a cash or stocks and shares ISA, you won’t qualify for a government bonus if you later use the money to buy a home.

Any interest earned while your money was in the help to Buy ISA (outside of the bonus) is unaffected by whether or not the home purchase goes through.

More information

This article is provided by the Money Advice Service.