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Help to Buy ISA Bonus

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Aug 8, 2022

Help to Buy ISA Bonus

Numerous customers have contacted us to ask questions about the Help To Buy ISA bonus, including how much and how to claim it and withdraw money.

This guide is providing information for the Help to Buy ISA Government Bonus towards the purchase price of a property for first-time buyers.

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What is the government bonus for a Help to Buy ISA?

As long as your Help to Buy ISA account has at least £1,600, the government will add 25% to any savings accounts. This bonus will be released after you have completed your mortgage application. Unlike a cash ISA, it cannot be accessed by the borrower or ISA provider prior to this point.

Account-holders can contribute as much as £200 per month towards their Help to Buy ISA. However, a one-off payment of up to £1,200 is possible during the first month to help speed up getting as much bonus money as possible.

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What is the maximum bonus for a first-time buyer ISA

You can only earn a maximum bonus of £3,000 on a first time buyer ISA via the Help to Buy program.

Between the time you open your account and when you submit your mortgage application, you will need to pay a total amount of £12,000.

What is the minimum bonus for a Help to Buy ISA

To earn any type of government bonus, you must pay at least £1,600 into a Help to Buy ISA. This would include a £400 top-up.

What amount of Help to Buy ISA Bonus will I receive?

You won’t receive any government bonus if you deposit less than £1,600 into your account before you close the mortgage. Any amount above that, and less than £12,000, would be increased by 25%. You would not earn an extra bonus if you have more than £12,000 in your Help To Buy ISA.

Below is an example of the Help to Buy ISA bonus payment table. It shows how much you could earn if your savings were specific.

This table shows the Help to Buy ISA bonus amounts, for multiples of £1,000.

To find out the exact numbers for other amounts, just add 25% to your savings or contact our help to buy ISAs providers. We will be happy to assist you.

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Where can I use my Help to Buy ISA Bonus?

The Help To Buy ISA bonus can only be used after you have completed your home purchase mortgage agreement. This bonus cannot be used to pay your exchange deposit (i.e. It is the amount you have to deposit to secure the property. However, it can be part of the completion funds. This includes the mortgage loan.

If you’re relying upon the government bonus to pay part of your mortgage deposit some lenders might be flexible. They may allow you to pay some funds in exchange, and the rest when you are done, but this would be entirely at the provider’s decision.

There are some lenders that are more flexible than others. Contact today and we’ll introduce you to the broker who is most likely to offer you a great deal.

All of our mortgage brokers are regulated by the financial conduct authority. We are happy to discuss your eligibility criteria free of charge whether it be for government schemes or a new residential mortgage.


How to claim the Help to Buy ISA Bonus

It’s easy to claim your Help to Buy ISA Bonus. Your solicitor will ask the government for the bonus when your mortgage is close to completion. It’ll be sent directly.

Closing a Help To Buy ISA

As your mortgage nears completion, you’ll need to follow these steps to close your Help to Buy ISA. You will also need to have your funds transferred to your lender.

  1. Cashing in your Help To Buy ISA: Withdraw all funds and ask for a closing statement from the manager. You will not receive the bonus if you empty your account without first asking for a Help to Buy ISA closing letter.
  2. Take the closing letter to your solicitor/conveyancer so they can apply for your bonus
  3. The bonus is sent directly to your solicitor/conveyancer so they can forward it to the lender along with the rest of the completion funds.
  4. If you’re exchanging and completing on the same day, here’s an expedited application process your solicitor/conveyancer can follow which does not involve closing the account – an up-to-date ISA statement will suffice for this.

If you have further questions or concerns regarding your Help to Buy ISA Bonus claim. The advisors who work with you will walk you through each step and match you with the best lender for your circumstances and needs.

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When should you close your Help to Purchase ISA

This should be done once both you and the seller’s solicitor have agreed on a completion date.

What is the average time it takes to close a Help To Buy ISA?

A Help to Buy ISA closing correspondence can take anywhere from five to seven working days.

A closure statement is valid for 12 months, but if your completion is delayed beyond this, your solicitor/conveyancer can apply for a purchase failing note from UKAR Corporate Services to ensure that the purchase doesn’t fall through.

If I am a cash buyer, can I get a Help to Purchase ISA?

You can save money in a Help to Buy ISA if your goal is to purchase a property. However, the additional 25% will not be available in the Help to Buy ISA does not have a mortgage.

What happens if I don’t want to buy a house?

If you are unable to complete your house purchase after your ISA has been closed to claim the bonus, you can request a ‘purchase error notification’ from your lawyer or conveyancer. This will allow you to re-deposit funds prior to applying for a mortgage.

Alternately you can use the property purchase failure notice to deposit your lump amount in a cash ISA, stocks or shares ISA.

If your bonus was already released, your solicitor/conveyancer will need to have it returned to the Help to Buy ISA Scheme Administrator before the notification can be obtained.

Talk to a mortgage broker to learn more about the Help to Buy ISA Bonuses

Contact us today to speak with a mortgage advisor, we will be happy to answer any questions.

Then, we’ll match you up with an advisor to have a no-obligation, free chat about the Help to Buy ISA bonus.

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