Aldermore is now offering a help to buy ISA product with an interest rate of 2%, available to both new and existing Aldermore customers. This also comes in the form of an ISA wrapper, allowing customers who already have a cash ISA for this tax year to also open a help to buy ISA.
Specifically designed to support people looking to buy their first home, the Aldermore help to buy product allows savers to put away up to £200 a month. In the first month customers can save up to £1,200, a whole £1,000 more than the standard monthly maximum, as well as helping those who have not yet taken full advantage of their ISA allowance for this tax year.
The government has equally planned to boost savings by 25% when first time buyers purchase a home to a maximum of £3,000, making this a great way for first time buyers to build a deposit and incentivise people to save. The Bank of England have also announced the introduction of a 2 year extension to the funding for lending scheme, to provide participants with the additional flexibility to draw unused allowances previously earned for positive net lending. The extension is predicted to be gradually phased out with borrowing allowances reducing over period of time.
Halifax has also tapped into the help to buy sector following recent changes to the government’s funding for lending scheme, now offering a help to buy ISA at a rate of 4%. This is available to any first time buyer over the age of 16. Deposits are currently limited to £200 a month, except for the opening month where customers can fund their account with an extra £1,000.
The launch of these help to buy ISAs come at a time when 52% of would-be first time buyers cited that the size of deposits required are preventing them from purchasing a property, according to survey conducted by Halifax. Out of 2,000 prospective first time buyers, 48% said they were likely to open a help to buy ISA with 43% already saving towards their deposit.