The Help to Buy: ISA scheme is now closed to new applicants. However, joint first-time buyers can still get a bonus from the government to put towards their first home – read our guide to find out more.
While the answer depends on a number of factors, we have helped many people successfully apply for a joint mortgage through this government scheme, some of whom have bad credit and had been turned down by lenders in the past.
In response to the enquiries we receive on this subject, we’ve put together a guide to Help to Buy ISAs and joint ownership.
Can I use a Help to Buy ISA for a joint mortgage application?
Customers often ask us if they can use their first-time buyer ISA for a joint mortgage application, and the answer is yes. If you’ve been paying into a Help to Buy ISA, you will get your cash bonus regardless of whether you’re applying for a joint or sole name mortgage.
Help to Buy ISAs for joint mortgages work in exactly the same way as it would for sole applicants. The scheme allows first-time buyers to save for a home tax-free and it comes with a government cash bonus of up to £3,000, released upon completion.
The account holder can pay in up to £200 per month and the government will top up these contributions by 25% (but an initial contribution of £1,200 can be made in the first month).
The maximum amount of cash bonus you can receive is £3,000 and to get the full amount you would need to pay in a total of £12,000. The minimum amount you’d need to save to get any kind of cash bonus is £1,600, which would come with a top-up of £400.
Speak to a Help to Buy ISA Expert
Help to Buy ISA: Can a couple have one each?
Yes, this is certainly possible! Couples can have a Help to Buy ISA each and this doubles the potential bonuses on offer. When couples use first time buyer ISAs to boost their mortgage applications, the government will pay out the bonuses separately to each individual when they complete on buying their property and close their accounts.
Can I get a Help to Buy ISA with my partner?
Customers often ask us things like “can you have a joint Help to Buy ISA?” and the answer is no. A Help to Buy ISA cannot be a joint account, but you can have more than one Help to Buy ISA per couple, as we discussed in the previous section. While this government scheme is for individual applicants, both partners can open an account each.
So, there are no standalone Help to Buy ISAs for couples, but you can have a Help to Buy ISA each if you’re buying a property with someone else.
Can a married couple get a Help to Buy ISA?
If you’re married, either you or your spouse could open a Help to Buy ISA and put the cash bonus towards your joint mortgage application. Alternately, you could open one each and save separately, but it is not possible to have a Help to Buy ISA in joint names.
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How to get the best rates on a Help to Buy ISA joint mortgage
For a Help to Buy ISA mortgage with two applicants, the lender will carry out their usual eligibility checks on both borrowers before deciding which rates to offer. Mortgage providers tend to base their lending decisions on the following factors…
Having clean credit will usually help convince the lender to offer you their top rates. If you have any adverse on your file, you may need a specialist lender to find a favourable deal.
Most lenders will expect you to have at least 10% deposit for a residential property, but some will accept 5% under the right circumstances. Putting down more deposit, if you’re in a position to, can help convince the lender to offer a more favourable deal.
Income and affordability
If you’re using a Help to Buy ISA and there will be two people named on the mortgage, the lender will base the loan on multiples of both applicants’ income. Most lenders offer x4.5 the combined salary, some offer x5 and a minority x6, under the right circumstances.
If you’re self-employed or need to include bonus income, commission or regular overtime in your mortgage application, a specialist lender might be needed to get the best deal.
The more confident the lender is that your declarable income will cover the mortgage payments, the more likely they are to offer favourable rates.
If a couple is using a first-time buyer ISA to get a mortgage in later life, they might find it harder to get the best interest rates, due to there being fewer lenders to approach.
Some providers won’t lend to anyone over 75, others over 85, but a minority will lend to pensioners of any age, as long as they can prove they will keep up with the payments.
Moreover, some people in their late 40s or 50s could have an issue with the mainstream lenders where the max age at the end of the term is normally 70, as a term past 70-75 might be needed for it to fit, affordability wise.
There are a number of mortgage options for retired borrowers and flexible lenders with no age restrictions. Get in touch and the advisors we work with make sure you’re introduced to the best provide for your needs and circumstances.
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