The Help to Buy ISA was a popular government scheme that helped first-time buyers save a deposit and ease their journey onto the property ladder.
Important update: The Help to Buy ISA scheme is now closed to new applicants. This page provides guidance for existing account holders on how to manage their savings, claim their government bonus, and whether transferring to an alternative scheme would benefit them.
What is a Help to Buy ISA?
The Help to Buy ISA was a government initiative designed to help first-time buyers save for a mortgage deposit. While you can no longer open a new account, those who opened one before the deadline can still benefit from the tax-free interest and the 25% government top-up until 2030.
Under the scheme, the government tops up your savings account by 25%, up to a maximum cap of £3,000. If you already have an account, this will continue to be the case until the end of 2029. In essence, for every £100 you save (above the qualifying limit), they add £25 to your balance.
Eligibility criteria and conditions
The scheme was open to all first time buyers but was closed to new applications from 30th November 2019.
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Monthly deposit limit - You can save up to £200 per calendar month, but if you miss a month, you cannot carry over the allowance to the next month
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Qualifying amount - You’ll need to have saved at least £1,600 to get the minimum bonus of £400, no bonuses are added before you reach this minimum qualifying limit
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Maximum bonus - The maximum bonus is £3,000 per person. To receive the total bonus you would need to save £12,000. Although you can continue to save beyond this limit, you will no longer qualify for a government bonus on anything above this threshold
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Property price caps - The home you buy must cost less than £250,000 (£450,000 in London) and you’ll need to qualify for a mortgage for the purchase
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Property use - The home purchased using these funds must be your only home that you intend to live in, they cannot be used for a buy-to-let property
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Bonus funds use - Despite the purpose of the savings account, the bonus funds gained from government top ups must be combined with the funds for the completion of the sale and cannot be used as a deposit. The money you saved yourself in the ISA (minus the bonus) can be used as a deposit, however
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Release of funds - Your solicitor must apply for your bonus and cannot do so until your home purchase is at the stage of completion
Important deadlines
Existing account holders continued saving deposits and bonus claims must be completed by the following dates respectively:
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30 November 2029 - Final date you can deposit funds into your Help to Buy ISA
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1 December 2030 - Final deadline to claim your 25% government bonus
If you do not buy a property by December 2030, you can withdraw your money and keep the interest earned, but you will lose the 25% government top-up.
How to claim the government bonus
When using the funds from your Help to Buy ISA, you do not apply for the bonus yourself. It must be processed by your solicitor or conveyancer during the property transaction. Here are the steps required to make a claim:
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Close your account when you are ready to buy
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Make an offer on a property of your choice that meets the criteria of the scheme
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Instruct your Solicitor to apply for the bonus funds from the government, they will need your final balance closing letter for the ISA
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The bonus funds are released at the completion stage of the transaction
Get bespoke advice about the latest mortgage schemes
Should you transfer to a Lifetime ISA (LISA)?
The Lifetime ISA (LISA) is the successor to the Help to Buy ISA and offers similar benefits but with different rules. Depending on your timeline and property goals, it may be beneficial to transfer your funds.
The LISA also offers the added benefit that your savings, including any government bonus, can be saved for retirement. However, if you withdraw funds for any other purpose than home purchase or retirement, you will no longer be entitled to the government bonus.
The LISA could also be a good option for those looking to buy a property outside of London which costs more than £250,000, given that the £450,000 cap applies nationwide. As it also has a higher maximum savings allowance, you could also potentially save your deposit more quickly with this scheme.
However, do keep in mind you’ll need to have a LISA for at least one year before you can use it, and that it imposes a significant 25% charge on withdrawals not used for property purchase or retirement.
Comparing the Help to Buy ISA and Lifetime ISA
|
Feature |
Help to Buy ISA |
Lifetime ISA (LISA) |
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Max annual savings |
£2,400 |
£4,000 (lump sum allowed) |
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Max government bonus |
£3,000 total |
£1,000 per year (up to £33,000 total) |
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Property price cap |
£250k (£450k London) |
£450k (Anywhere in UK) |
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Use of bonus |
Payout at completion so cannot be used as a deposit |
Bonus compounds monthly with interest so can be used as a deposit |
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Withdrawal penalty |
No penalty, but you lose the bonus if withdrawn for any other reason that home purchase |
25% penalty on your savings total (inclusive of bonus) if not used for buying a home or retirement |
Transferring your ISA to another provider
Yes, if you already have an account, you can transfer to get a better Help to Buy ISA interest rate. However, you must use the official ISA Transfer process. Do not withdraw the cash yourself, or you will lose the tax-free status and potentially the bonus eligibility.
It’s worth noting, however, that many providers have withdrawn from the market since the scheme closed to new applicants.
Best providers to transfer to
If you want to keep your current H2B ISA structure (which allows you to use the bonus for properties up to £250,000—or £450,000 in London—and allows you to withdraw money freely), these lenders currently offer the most competitive rates for transfers:
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HSBC (2.75% AER): Currently one of the highest rates on the market for H2B ISAs. However, this is usually restricted to existing HSBC current account, Flexible Saver, or Premier Savings customers.
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Lloyds Bank / Halifax / Bank of Scotland (2.20% AER): These three brands (all part of Lloyds Banking Group) offer a solid 2.2% on balances up to £12,000. They are consistent "big name" options that accept transfers from other providers via a simple phone call or branch visit.
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Barclays: While their rate is often lower than HSBC's, they are one of the few major banks that still actively support H2B ISA transfers through their app and online banking, making the process very streamlined for existing customers.
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NatWest / Royal Bank of Scotland: They allow H2B transfers for existing customers and provide a reliable digital platform for managing the account alongside your current account.
The above provider information was accurate at the time of writing but us subject to change
How to get a mortgage when using a Help to Buy ISA
You can use any residential mortgage to buy a home with funds from your help to buy ISA, but it cannot be used alongside a buy-to-let mortgage. You should also be able to use it with the shared ownership scheme, although keep in mind that the £250,000 limit applies to the total cost of the property, not the share you’re buying.
It may also be possible to use it alongside other first-time buyer mortgages and schemes, such as guarantor mortgages and the First Homes scheme. However, not all mortgage lenders will provide guarantor mortgages, or support the use of home ownership schemes, so it’s a good idea to speak to a broker with experience in these schemes before you apply.
Get started here to speak with a Help to Buy ISA expert today.
FAQs
Generally, no, as the scheme is intended to support first-time buyers into home ownership. However, if your personal circumstances change significantly, you may be able to obtain permission from your lender (a consent to let) to do so.
If you buy with the sole intention of renting your property out, which you would need a Buy-to-Let mortgage for, you will be required to repay the bonus.