People don’t have long left to sign up for a Help To Buy ISA, designed to help first-time buyers save for a house deposit.
If you get an account, the government will add 25% to your savings, up to a maximum of £3,000 on savings of £12,000. This means that for every £1,000 you put in, the government adds £250 to the pot – until you reach the cap.
However, the Help to Buy ISA will close to new accounts at midnight on 30 November 2019. If you have already opened an account – or do so before the deadline – you’ll be able to continue saving until November 2029.
For the most part, you can apply online up until the closing date, according to MoneySavingExpert, but there are a few exceptions – so it’s worth checking closely. Martin Lewis has been urging people who are saving for a house to sign up before it’s too late.
“My big message today is if you’re aged 16+ and you’ve never owned a home in any way, shape, size or form before, I would go and put a quid in a Help to Buy ISA right now, even if you’re not sure you’ll use it,” he said, appearing on ITV’s This Morning earlier this week.
So, should you get one before the deadline?
What do you need to know about getting one?
Firstly, people can only qualify for this type of account if they’re first-time buyers and do not own a property anywhere else in the world.
Couples buying their first home together can both sign up for individual accounts, which is particularly attractive as it means the grand total of money you can get from the government is doubled – a charming £6,000.
You can open an account with any bank, building society or credit union that offers a Help to Buy ISA account. The money from the ISA can be used to buy any home in the UK worth up to £250,000 (or up to £450,000 if you’re buying a brand-new home in London). It can’t, however, be used to buy properties abroad or used for somewhere you’re going to rent out to somebody else.
It’s worth noting the government won’t start adding the 25% bonus until you’ve put a minimum of £1,600 in the account, according to the Money Advice Service. You can put a maximum of £1,200 into the account in the first month and a further £200 each month after that.
What other options are there to help you save for your first home?
Emma Craig, money spokesperson at MoneySuperMarket, told HuffPost UK: “If you are a first-time buyer, specifically saving for a mortgage, the Help to Buy ISA is a good option with the top rate currently at 2.58%. Bear in mind that you can only use the money saved to purchase a property.”
But, she adds, if you’re unsure whether a Help To Buy ISA is for you, there is a comparative product which will be around after the deadline.
The Lifetime ISA (or LISA) – aimed at those saving for their first home or retirement – has a similar 25% bonus commitment from the government and you can save up to £4,000 in a year. In comparison, you save £3,400 in the first year with a Help to Buy account, and £2,400 each year afterwards.
“Money can be transferred from Help to Buy to the Lifetime ISA as well, so if you open it you can always shift it over,” says Craig.
This article originally appeared on HuffPost.