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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 22nd March 2021*

Countless customers have contacted us with questions about Help to Buy ISA bonuses, specifically how much they will be entitled to and how to claim this amount.

We’ve put together this guide to Help to Buy ISA government bonuses to answer these questions and many more.

The following topics are covered below…

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How much is the government bonus on a Help to Buy ISA?

The government will top up any savings you have built up in your Help to Buy ISA account by contributing an additional 25% of the total value of the pot, as long as the amount you have saved is at least £1,600. This bonus is released upon the completion of your mortgage application and cannot be accessed by the borrower before this point.

Account holders can contribute up to £200 per month to their Help to Buy ISA, although during the first month, a one-off deposit of up to £1,200 can be made.

What is the maximum bonus on a first-time buyer ISA?

The maximum bonus you can earn on a first-time buyer ISA through the Help to Buy scheme is £3,000. To get the full amount you would need to pay in a total of £12,000 between the day you open the account and the completion of your mortgage application.

What is the minimum bonus on a Help to Buy ISA?

The minimum amount you need to pay into a Help to Buy ISA to earn any kind of government bonus is £1,600, which would come with a top-up of £400.

How much Help to Buy ISA bonus will I get?

If you were to deposit less than £1,600 in your account before the completion of the mortgage, you wouldn’t get any government bonus. Any amount over that and less than £12,000 would be topped up by 25%. If you end up with more than £12,000 in your Help to Buy ISA, you would only earn a bonus on the first £12,000, a maximum of £3,000.

The Help to Buy ISA bonus payments table below provides examples of how much bonus you would earn if you were to save up specific amounts…

Amount Paid In Government Bonus Total amount in ISA
£1,600 £400 £2,000
£2,000 £500 £2,500
£3,000 £750 £3,750
£4,000 £1,000 £5,000
£5,000 £1,250 £6,250
£6,000 £1,500 £7,500
£7,000 £1,750 £8,750
£8,000 £2,000 £10,000
£9,000 £2,250 £11,250
£10,000 £2,500 £12,500
£11,000 £2,750 £13,750
£12,000 £3,000 £15,000

The table above reveals Help to Buy ISA bonus amounts for multiples of £1,000 for the most part. For the exact figures for other amounts, simply add 25% to the amount you have saved or make an enquiry and the advisors we work with will assist you.

What can I use my Help to Buy ISA bonus for?

As the Help to Buy ISA bonus is only available upon the completion of your mortgage agreement, it can usually only be used to pay any outstanding costs such as solicitor fees. It cannot help with your exchange deposit (i.e. the money you need to put down to secure the property) but can form part of the completion funds, including the mortgage deposit.

However, if you’re relying on the government bonus to pay off part of your deposit, some lenders might be flexible and allow you to pay some of the funds on exchange and the rest upon completion, but this would very much be at the provider’s discretion.

Some lenders are more flexible about these things than others, so give us a call on 0808 189 2301 or make an enquiry and the brokers we work with will introduce you to one who’s likely to offer you a good deal.

How to claim the Help to Buy ISA bonus

Claiming your Help to Buy ISA bonus is a simple process. When your mortgage is nearing completion your solicitor will request the bonus from the government and it’ll be sent directly to them.

Closing a Help to Buy ISA

When your mortgage approaches completion, you will need to take the following steps to close your Help to Buy ISA and have the funds transferred to your lender…

  1. Cashing in your Help to Buy ISA: Withdraw all of your funds and request a closing statement from your ISA manager. Don’t empty the account without asking for a Help to Buy ISA closing statement first as this will mean you miss out on the bonus.
  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 onto 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 any further questions or concerns about your Help to Buy ISA bonus claim, get in touch and the advisors we work with will talk you through the process step-by-step and make sure you’re paired with the right lender for your needs and circumstances.

When to close your Help to Buy ISA

You should do this once you and your seller’s solicitor agree on a date for completion.

How long does it take to close a Help to Buy ISA?

It can take between five and seven days working days to receive a Help to Buy ISA closing letter.

A closure statement is valid for 12 months, but if you 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.

Can I have a Help to Buy ISA if I’m a cash buyer?

Yes, you can still save in a Help to Buy ISA if you’re planning to buy a property outright, but you will not qualify for the additional 25% if you take out a Help to Buy ISA without a mortgage at the end of it.

What if I don’t buy a house?

If your house purchase does not go ahead after you’ve closed your ISA to claim the bonus, it’s possible to reopen the account by requesting a ‘purchase failure notification’ from your solicitor or conveyancer. If you take this to your lender, you will be able to re-deposit the funds before you apply for a mortgage again.

Alternately, you can use your purchase failure notification to deposit your lump sum in a cash or stocks and 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.

Speak to an expert mortgage broker about Help to Buy ISA bonuses

If you have questions and want to speak to an expert for the right advice, call us on 0808 189 2301 or make an enquiry

We’ll then match you with an advisor for a free, no-obligation chat about your Help to Buy ISA bonus.

Updated: 22nd March 2021
OnlineMortgageAdvisor 2021 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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