Help to Buy ISA Guide
The Help to Buy ISA was a flagship government scheme designed to assist first-time buyers in getting onto the property ladder. Although the scheme closed to new applicants in November 2019, millions of accounts remain active in 2026. This comprehensive guide covers everything existing account holders need to know about claiming their 25% bonus, impending deadlines, and how it compares to the newer Lifetime ISA.
Help to Buy ISA Bonus Calculator
Use this calculator to estimate the government bonus you could receive based on your current or projected savings.
Status of the Help to Buy ISA in 2026
The Help to Buy ISA is currently in a "legacy" phase. It is strictly closed to new applicants. The final date to open a new account was 30 November 2019. If you already hold an account, you are in a privileged position to benefit from the government's 25% top-up, but you must be aware of the strict timelines that are now approaching.
In 2026, many account holders are nearing the stage where they are ready to buy. It is crucial to understand that while you can transfer your Help to Buy ISA to another provider (to seek a better interest rate), you cannot open a "new" one. You must complete a specialized ISA transfer process to keep the tax wrapper and bonus eligibility intact.
Key Deadlines You Must Know
- November 2029: This is the final date you can pay money into your Help to Buy ISA. After this date, no further contributions can be made, but the account can remain open.
- 1st December 2030: This is the absolute deadline to claim your government bonus. If you have not purchased a property and claimed the bonus by this date, the opportunity is lost forever.
How the 25% Bonus Works
The core appeal of the Help to Buy ISA is the government bonus. For every £200 you save, the government adds £50. This equates to a 25% return on your savings, tax-free. However, there are floor and ceiling limits to this bonus which you must navigate carefully.
Minimum and Maximum Limits
To qualify for any bonus at all, you must have saved at least £1,600 in your account. 25% of £1,600 is £400, which is the minimum bonus amount paid out. If your balance is below £1,600 at the time of claiming, no bonus will be awarded.
The maximum amount you can save in the account that is eligible for the bonus is £12,000. This generates a maximum bonus of £3,000. You are permitted to save more than £12,000 in the account (accumulating interest, for example), but the bonus is capped at £3,000.
Therefore, the total potential purchasing power from a maxed-out Help to Buy ISA is £15,000 (£12,000 of your money + £3,000 government bonus).
Monthly Deposit Limits
Unlike other ISAs where you can dump large lump sums in at the end of the tax year, the Help to Buy ISA has a strict monthly deposit limit of £200. This makes it a "drip-feed" savings account. Because of this limit, building up to the maximum £12,000 takes considerable time—approximately 4 to 5 years of maximum contributions.
Property Eligibility Rules
Not every property purchase is eligible for the bonus. The scheme was designed to help people buy modest first homes, and as such, there are price caps. These caps have been a subject of contention as house prices have risen since the scheme's inception.
- Outside London: The maximum property price is £250,000.
- Inside London: The maximum property price is £450,000.
If the property you wish to buy costs even £1 more than these limits, you cannot claim the bonus. In the current 2026 housing market, the £250,000 limit outside London can be restrictive in certain areas like the South East or major cities, leading some savers to consider the Lifetime ISA (LISA) instead.
The "Completion vs Exchange" Issue
One of the most critical technical details of the Help to Buy ISA is when the bonus is paid. The bonus is paid on completion of the property purchase, not on exchange of contracts.
This is significant because the exchange deposit (usually 10% of the property price) is due at the exchange of contracts. Since the bonus money has not arrived yet, you cannot use the bonus cash to fund your exchange deposit. You can only use your own savings. The bonus is essentially a final top-up that reduces the size of the mortgage you need or covers completion costs.
This differs from the Lifetime ISA, where funds can be used for the exchange deposit, offering greater flexibility for buyers with limited cash flow.
Help to Buy ISA vs Lifetime ISA (LISA)
Since the Help to Buy ISA closed to new entrants, the Lifetime ISA (LISA) has become the primary alternative. Many holders of H2B ISAs consider transferring to a LISA. Here is a detailed comparison to help you decide if you should switch.
| Feature | Help to Buy ISA | Lifetime ISA (LISA) |
|---|---|---|
| Status | Closed to new applicants | Open to UK residents aged 18-39 |
| Bonus | 25% | 25% |
| Max Bonus per Year | £600 (approx, based on £200/mo) | £1,000 (based on £4,000/yr limit) |
| Max Total Bonus | £3,000 total cap | £33,000 (theoretical max) |
| Property Price Cap | £250k (UK), £450k (London) | £450k (Everywhere) |
| Buying Process | Bonus paid at completion | Bonus can be used for exchange deposit |
| Withdrawals | Penalty-free (just no bonus) | 25% penalty if not for home/retirement |
Should You Switch?
If you are buying outside London and looking at properties over £250,000, you almost certainly need to switch to a LISA to get any bonus. However, be careful: a LISA must be open for 12 months before you can use it to buy a home. If you plan to buy in the next 6 months, sticking with the Help to Buy ISA is safer.
Also, consider the withdrawal rules. If there is a chance you might need your savings for an emergency (not a house), the Help to Buy ISA allows access without penalty. The LISA imposes a strict 25% penalty on unauthorized withdrawals, which effectively recovers the government bonus plus a small chunk of your own money.
Detailed Claiming Process
Claiming the bonus is not something you do personally via an app or website. It is a legal process handled by your conveyancer.
- Close the Account: When you are close to completion, you must instruct your bank to close your Help to Buy ISA.
- Get the Closing Letter: The bank will provide a "closing statement" or letter proving the final balance. Do not just withdraw the money; formally close the account to get this document.
- Pass to Solicitor: Give this document to your conveyancer.
- Solicitor Applies: The solicitor applies to the government portal for the bonus funds.
- Funds Release: The government releases the 25% bonus to the solicitor, who adds it to the completion monies.
Solicitors are capped at charging £50 + VAT for this service, ensuring that the administrative cost does not eat significantly into your bonus.
Joint Applications
If you are buying with a partner, you can both use your own separate Help to Buy ISAs (or one H2B and one LISA). This means you can potentially combine two bonuses. For a couple with two maxed-out Help to Buy ISAs, that is £6,000 in free government money towards your first home.
However, the property price cap applies to the property, not the individual. You cannot buy a £500,000 house outside London just because there are two of you. The house must still cost £250,000 or less.
Frequently Asked Questions
1. Can I still open a Help to Buy ISA in 2026?
No. The scheme closed to new applicants on 30th November 2019. Only those who opened an account before this date can continue to use it.
2. What happens if I buy a house over the £250,000 limit?
You will not receive the bonus. You can still use your saved cash to buy the house, but the 25% top-up will be forfeited. In this scenario, transferring to a LISA (which has a £450,000 limit nationwide) might have been a better strategy if done in time.
3. Can I use both a Help to Buy ISA and a Lifetime ISA?
You can own both, but you can only use the bonus from one of them for the purchase of a single property. You cannot "stack" the bonuses on one house purchase.
4. When is the deadline to use my Help to Buy ISA?
You can pay in until November 2029 and must claim the bonus by December 2030.
5. Can I withdraw money from my Help to Buy ISA?
Yes, anytime. Unlike the LISA, there is no penalty for withdrawal. You simply won't get the bonus on the amount withdrawn. This flexibility is the H2B ISA's biggest advantage over the LISA.
6. Does the bonus get paid to me or my solicitor?
It is paid to the solicitor. You never see the cash in your own bank account; it goes straight to the seller/lender as part of the completion funds.
7. Is the Help to Buy ISA bonus tax-free?
Yes, completely tax-free.
In conclusion, while the Help to Buy ISA is an older product, it remains a valuable asset for those who have one. With a potential £3,000 bonus on the table, it is worth maximizing your contributions before the 2029 deadline or carefully considering a switch to a Lifetime ISA if your property aspirations exceed the strict price caps.