How the Help to Buy ISA Works
The Help to Buy ISA was a government scheme to help first-time buyers save for a deposit. For every £200 you save, the government adds £50 — a 25% bonus. The bonus is capped at £3,000 (on savings of £12,000), paid on completion of your property purchase.
Key Rules at a Glance
You can save up to £200 per month (plus a one-off higher initial deposit of £1,200 in month one). The minimum bonus is £400, meaning you need at least £1,600 saved. The account closed to new applicants in November 2019, but existing holders can save until November 2029 and claim their bonus until December 2030.
The Bonus is Paid at Completion, Not Exchange
This is a common source of confusion. The Help to Buy ISA bonus cannot be used as part of your exchange deposit — it is paid directly to your solicitor at completion. You need to fund the exchange deposit (typically 5–10% of the property price) from your savings alone, with the bonus topping it up at the end. The Savings Goal Calculator can help you plan your deposit timeline.
Help to Buy ISA vs Lifetime ISA
The Lifetime ISA (LISA) is widely considered the better option for most first-time buyers. The LISA allows up to £4,000 per year in contributions (vs £2,400 for the Help to Buy ISA), the bonus is paid monthly into your account (rather than at completion), and there is no overall bonus cap — you can receive up to £1,000 per year until age 50. The only significant drawback is a 25% withdrawal penalty for non-qualifying withdrawals. If you haven't yet bought your first home and are under 40, the Lifetime ISA is worth comparing carefully.
Frequently Asked Questions
What is the Help to Buy ISA bonus?
The government pays a 25% bonus on your Help to Buy ISA savings when you buy your first home. The minimum bonus is £400 (on savings of £1,600) and the maximum bonus is £3,000 (on savings of £12,000). The bonus is paid on completion of your property purchase, not at exchange.
Can I still open a Help to Buy ISA?
No. The Help to Buy ISA closed to new applicants on 30 November 2019. If you already have one, you can continue saving until 30 November 2029 and claim the bonus until 1 December 2030. If you do not yet have one, you cannot open a new account — consider the Lifetime ISA instead.
What is the maximum monthly saving in a Help to Buy ISA?
You can save up to £200 per month. In the very first calendar month you opened the account, you could deposit up to £1,200 (a one-off initial deposit of £1,000 plus the standard £200 monthly allowance). You cannot carry over unused monthly allowance to future months.
What is the property price limit for the Help to Buy ISA bonus?
The property must cost £250,000 or less outside London, or £450,000 or less in London, to qualify for the bonus. If the property costs more, you do not receive the bonus — but you can still use your savings towards the purchase.
Help to Buy ISA vs Lifetime ISA — which is better?
For most first-time buyers under 40, the Lifetime ISA is more beneficial: it allows up to £4,000 per year, the maximum bonus over time is much higher, and the bonus is added monthly. The Help to Buy ISA has no withdrawal penalty if you don't buy a home, while the LISA has a 25% penalty for non-qualifying withdrawals. If you already have a Help to Buy ISA close to the £12,000 cap, maximise it before also contributing to a LISA.
Can I use the Help to Buy ISA bonus on any property?
No. The property must be your first home, purchased with a mortgage, and within the price limits (£250,000 outside London, £450,000 in London). The bonus cannot be used at exchange — only at completion. Cash purchases do not qualify.
What happens to my Help to Buy ISA if I don't use it for a house?
Your savings remain yours and continue to earn interest. However, the 25% government bonus is only paid on a qualifying first home purchase — you cannot claim it for any other purpose. Unlike the Lifetime ISA, there is no withdrawal penalty; you simply won't receive the bonus.