New applications for a Help to Buy ISA are now closed

Help to Buy ISAs are no longer available, however, if you opened one before applications closed on 30 November 2019, you can continue saving into your account and earning a government bonus to put towards your first home until November 2029.

The Help to Buy ISA was a type of ISA specifically designed to help first-time buyers save up for their new home.

The ISA was announced in March 2015, and was available to both couples and singles looking to save their 5% deposit.

How did it work?

While you can no longer open a Help to Buy ISA, if you already opened an account the government will contribute towards the cost of buying your first home as you save money.

That means that whatever you can pay into your account each month, the government will top it up with an extra 25%. If you manage to save the maximum amount of £200, the government will be topping up your account with £50 each month.

The government bonus has a cap of £3,000 on £12,000 of savings. The minimum you need to have saved to get the bonus is £1,600 (so a £400 bonus).

The Help to Buy ISA works the same way as a regular cash ISA, meaning you can build up tax-free savings, and earn interest as well as getting the bonus at the end.

The government bonus can only be put towards a first home located in the UK, with a purchase value of less than £450,000 or less in London and £250,000 or less in all other parts of the UK.