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Getting the best Help to Buy Isa deal

This article is part of
Guide to Help to Buy Isas

When the Help to Buy Isa launched, less than 10 per cent of UK savings providers were on board, according to

Only 12 providers announced their Help to Buy offerings by 1 December, according to the website’s director Anna Bowes.

As of 1 December, Ms Bowes says the best rate available is from Halifax – offering a 4 per cent tax free/AER, although she added that most rates offered so far are underwhelming.

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“Although it is still early days and many providers are yet to announce what they will offer, it will be extremely disappointing if all Isa providers don’t get on board.

“We need the competition to drive rates in the right direction, so it is disappointing that only 12 providers so far are offering Help to Buy Isas,” continued Ms Bowes.

“It is the providers that force the need for larger deposits to achieve an affordable rate on their mortgage, so the least they can do is support savers trying to build a reasonable deposit.”

As in the UK there is a huge emphasis on owning property, Ms Bowes says Help to Buy Isas are bound to be popular with anyone that has aspirations of home ownership.

Given that the accounts are more akin to regular savings accounts, she said rates could have been closer to those currently available on standard regular saving accounts, to reflect the small amounts being saved.

Ms Bowes commented: “Halifax could well clean up with its market leading 4 per cent rate – double what the majority are currently offering.

“Having said this, the interest rate is really the icing on the cake. A generous 25 per cent bonus is a great incentive for those who are struggling to find the money to save for a deposit.”

While the Help to Buy Isa will not help first-time buyers to find the cash to save, the 25 per cent bonus is a real incentive to help them put away as much as they can afford, explained Ms Bowes.

“It might be only £5 or £10 a month at the beginning, but knowing that every £1 will be boosted by 25p makes it far more compelling to tighten your belt and do what you can.”

Looking to the future, according to the Money Advice Service, you will be able to switch from one provider to another whenever you like and as interest rates change in order to get the best deal.

The rules for transferring will be the same as for Cash Isas.

As with transferring Cash Isas, you should make sure you change Help to Buy Isa providers carefully so you do not accidentally withdraw the money rather than transferring it.