NORMAL ISA

A normal ISA is a tax free savings or investment account that enables UK taxpayers to save or invest within a tax free ‘envelope’. There are a variety of ISAs available including Flexible ISAs and Junior ISAs (for the under 16s).

With an ISA you’ll earn tax-free interest on your savings or a return on your investments. You can only open one ISA per year, but it is possible to transfer to another with another provider.

At the time of writing a tax payer may invest or save up to £20,000 per annum into an ISA and cash you put into UK banks or building societies (that are authorised by the Prudential Regulation Authority) is protected by the Financial Services Compensation Scheme (FSCS).


HELP TO BUY ISA

By taking out and contributing to a Help to Buy ISA the government will top up your savings by 25%. In other words, for every £200 you save, the government will contribute £50 in addition to any interest earned.

The most you can get from the government is £3,000, so the maximum amount you can save in a Help to Buy ISA is £12,000. The minimum amount you need to save to qualify is £1,600. The maximum amount must be saved over a period of time of up to 4 ½ years.

You can open your ISA with an initial sum of up to £1,000 which also qualifies for the 25% boost from the government and it’s worth noting that Help to Buy ISAs are available to each first-time buyer, not each house.

For example, if you’re buying a property with your partner, you’ll be able to get a contribution from the Government of up to £6,000 towards the purchase of your home. However, this bonus sum, unlike the ISA capital saved and any ISA interest accrued, cannot be used against purchase costs or a deposit but is simply deductible from the mortgage sum otherwise necessary. The role of the bonus is therefore to reduce the mortgage sum and increase equity in the property.

Your solicitor or conveyancer must apply for your government bonus due under the Help to Buy ISA once you’re close to buying your home. Once they receive the bonus, it will be added to the money you’re putting towards your first home.

In order to qualify for a Help to Buy ISA you must be;

  • a first-time buyer
  • aged 16 or over
  • You can use it to buy any home worth under £250,000 (or under £450,000 in London).

However, you can’t use a Help to Buy ISA if you’re going to rent out the property or to buy a property overseas and you can’t have more than one Help to Buy ISA. Also, you can’t open a Help to Buy ISA and a normal Cash ISA in the same tax year.

For more details on how much you can expect to be able to borrow and what this will cost you every month contact our mortgage advisers on 01928 507477.

You may also be interested in:

Download our Free First Time Buyers Guide

Recent posts

According to a report in the Guardian, senior ministers have asked Treasury officials to look into a “proportional” property tax to see how it would work as an alternative to the existing stamp duty land tax on owner-occupied homes. 

More than a quarter of UK adults in long-term relationships (26%) have reported that despite living together, they keep their finances separate from one another.

There has been a rise in both rent and mortgage costs over the last three years, with renters seeing a greater increase in their monthly payments than those with a mortgaged property.

The new Delayed Start Mortgage launched by Skipton Building Society allows first time buyers to postpone the first three mortgage payments. This product has been designed to help soften the blow of moving in costs for first time buyers. 

Mortgage lenders are starting to recognise their “Green” responsibilities when it comes to the different products they offer. 

A recent study by Boon Brokers where 1,000 people who had used an estate agent over the last year were surveyed, showed that a whopping 52% said they were pressured into using the estate agents’ in-house mortgage broker.

Analysts are predicting further rate cuts this year, with the next one possibly coming down to 4% when the Bank of England’s Monetary Policy Committee meet on Thursday 7th August 2025.

The Financial Conduct Authority (FCA) has shared new changes to mortgage rules with the aim to simplify remortgaging, and encourage competition within the mortgage market.