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Help To Buy Isa: What You Need To Know

With (Other OTC: WWTH - news) the Government's new Help to Buy Isas now available to aid people on to the first rung of the property ladder, Sky News examines the details:

:: What are Help to Buy Isas?

The savings accounts are only available to first-time buyers looking to build up enough cash for a deposit.

The accounts are available from banks and building societies - offering customers competitive rates of interest - and you can switch between providers to maximise available interest rates.

The amounts saved will be 'topped up' by a Government bonus of up to 25% to a maximum £3,000, at the point of house purchase.

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The aim is to help tackle what the Government sees as a crisis in ownership, with too many families faced with having to rent.

:: Do I qualify?

A Help To Buy Isa saver must be a UK resident, aged 16 or over and buying a property in the UK for the first time.

This house must not be for the buy-to-let market.

The cost of the home must not exceed £250,000 unless the property is in London, where the limit is £450,000.

:: How much can I pay into my Isa?

Savers have the option of paying in a one-off lump sum of £1,000 to get the account under way.

There is a monthly deposit limit of £200. Once the balance reaches £12,000, it is available for the maximum amount of Government support of £3,000.

Couples can open individual accounts, meaning they could potentially claim £6,000 collectively from the Government.

The interest you earn also counts towards your total pot and bonus level.

:: How long can the Isa run for?

The scheme will be closed to new entrants from 30 November 2019 and the bonus must be claimed, through the purchase of a house, by 1 December 2030.

:: How can I claim the Government bonus?

This will be handed by your solicitor or conveyancer who applies for the money.

Should the house purchase fall through, the legal representative would have to ensure the bonus is paid back.

:: Are there limitations on the Isas available to me?

An individual can only hold one Help to Buy Isa.

Such savers are also prevented from opening other Isa accounts but may continue to hold existing Isas.

:: Are help to buy Isas worth it?

Consumer experts are full of praise for the idea, with moneysavingexpert.com describing them as a "no-brainer".

Halifax is currently offering a 4% annual rate to lead the market but rates are expected to be more competitive as the scheme beds in.

However, there is no guarantee that future governments will maintain the Isa offer, meaning there is a risk to bonuses (Other OTC: UBGXF - news) .