If you already have a Help to Buy ISA

You can pay in up to £200 each month.

The government will top up your savings by 25% (up to £3,000) when you buy your first home.

If you are buying with someone who also has a Help to Buy ISA, both of you will get the 25% bonus.

You can pay into the ISA until November 2029. You can claim the 25% bonus until November 2030.

When you buy your property

The home you buy must:

• have a purchase price of up to £250,000 (or up to £450,000 in London)
• be the only home you own
• be where you intend to live

Your solicitor or conveyancer will apply for the extra 25%.

You do not have to pay it back.

You can use the scheme with an equity loan..

The Help to Build Equity Loan

If you’re building a home or hiring someone to build one, you may be able to get a government-backed loan to cover part of the cost. This is called a Help to Build equity loan.

This guide explains how to get the loan in England. There are different ways to:

• get help to build a home in Wales
• get help to build a home in Scotland

There’s no government-backed loan to help build homes in Northern Ireland. You can read about raising money to build your own home in Northern Ireland.

What you can apply to fund

You can apply for the Help to Build equity loan to do any of the following:

• buy land and build a new home on it
• build an ‘airspace development’ flat (airspace developments are new properties built in unused space above an existing building)
• convert a commercial property into a residential property
• build a ‘custom shell home’ (where a professional builds the structure, but you’re responsible for the design and layout inside)
• demolish an existing property and replace it with a new home

You cannot use the loan to build:

• more than one home
• upgrades to your home
• a second home - you must live in the new home and sell any other residential property you own within 12 months of the date the new home is built

How much money you can get

You can only get an equity loan if you’re also able to get a mortgage for the home you want to build.

You can apply for between 5% and 20% of the estimated land and building costs for your home (or up to 40% of estimated land and building costs in London). 

The estimated costs cannot be more than: 

• £600,000 if you’re buying the land and building your home  (the build cannot be more than £400,000)
• £400,000 if you’re building on land you already own

When estimating the cost of your project, do not include:

• VAT you’ll pay on building costs or anything else
• money you’ll set aside in case the project goes over budget (whether it’s yours, or part of the mortgage)

The mortgage you need

Your mortgage does not have to be approved at the time you apply, but to start your project and get an equity loan, you’ll need a mortgage offer from a lender.

You should talk to a lender to check you can get the right mortgage.

Your mortgage must be:

• a self-build mortgage (this is a mortgage you get when building a home yourself)
• from a lender that’s registered with Help to Build (check their website or ask them)

Fees

You must pay a £1 monthly fee to manage the loan, starting from when Homes England gives the loan amount to your lender.

The £1 fee is collected by the equity loan administrator. This is a person Homes England appoints to manage the loan.

Interest

You must pay interest on the loan each month, starting 5 years after the date that’s shown on the equity mortgage document.

In year 6, you’ll pay a total of 1.75% interest on the equity loan amount you borrowed, divided into 12 monthly instalments.

For example, if you got an equity loan of £80,000, 1.75% would be £1,400. You’d pay 12 monthly instalments of £116.67, adding up to £1,400.

From year 7 onwards, the amount of interest you pay will go up in line with the consumer price index, plus 2%. You can read more about how much interest you’ll pay.

Paying interest does not count towards paying back the equity loan.

If you miss a fee or interest payment

You may need to pay recovery costs or interest on the amount you owe

The Lifetime ISA

You will incur a lifetime ISA government withdrawal charge (currently 25%) if you transfer the funds to a different ISA or withdraw the funds before age 60 and you may therefore get back less than you paid into a lifetime ISA.

By saving in a lifetime ISA instead of enrolling in, or contributing to an auto-enrolment pension scheme, occupational pension scheme, or personal pension scheme:
  (i) you may lose the benefit of contributions from your employer (if any) to that scheme; and
  (ii) your current and future entitlement to means tested benefits (if any) may be affected.

You can use a Lifetime ISA (Individual Savings Account) to buy your first home or save for later life. You must be 18 or over but under 40 to open a Lifetime ISA.

You can put in up to £4,000 each year, until you’re 50. You must make your first payment into your ISA before you’re 40.

The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.

The Lifetime ISA limit of £4,000 counts towards your annual ISA limit. This is £20,000 for the 2023 to 2024 tax year.

You can hold cash or stocks and shares in your Lifetime ISA, or have a combination of both.

When you turn 50, you will not be able to pay into your Lifetime ISA or earn the 25% bonus. Your account will stay open and your savings will still earn interest or investment returns. 

To open and continue to pay into a Lifetime ISA you must be a resident in the UK, unless you’re a crown servant (for example, in the diplomatic service), their spouse or civil partner.

Withdrawing money from your Lifetime ISA

You can withdraw money from your ISA if you’re:

• buying your first home
• aged 60 or over
• terminally ill, with less than 12 months to live

You’ll pay a withdrawal charge of 25% if you withdraw cash or assets for any other reason (also known as making an unauthorised withdrawal). This recovers the government bonus you received on your original savings.

Example 1

Assuming no growth, initial savings of £800 will earn a 25% government bonus of £200 and give you a pot of £1,000. If you wish to withdraw the entire pot, a 25% charge will apply to the full £1,000. You’ll have to pay a government withdrawal charge of £250. This will leave you with £750.

If you only wish to access some of your money, you’ll have to take the withdrawal charge into account when requesting funds. You’ll have to withdraw more than the amount you need, to cover your needs and the 25% withdrawal charge.

Example 2

If you need enough cash to cover a £120 bill, you’ll have to withdraw more than you actually require. Withdrawing £160 means you pay a 25% withdrawal charge of £40, and receive £120 in cash to meet the bill.

Buying your first home

You can use your savings to help you buy your first home if all the following apply:

• the property costs £450,000 or less
• you buy the property at least 12 months after you make your first payment into the Lifetime ISA
• you use a conveyancer or solicitor to act for you in the purchase - the ISA provider will pay the funds directly to them
• you’re buying with a mortgage

Buying with someone else

If the person you’re buying with has a Lifetime ISA, you can both use your savings and government bonus.

To qualify you must both:

• be first-time buyers
• meet all the conditions under ‘Buying your first home’

If you have a Help to Buy ISA

If you have a Help to Buy ISA as well as a Lifetime ISA, you can only use the government bonus from one of them to buy your first home.

You can transfer money from a Help to Buy ISA to a Lifetime ISA. If you transfer money from a Lifetime ISA to a Help to Buy ISA you’ll have to pay the 25% withdrawal charge.