The Help To Buy ISA, announced in this year’s Budget, has finally arrived and providers have been scrambling to announce their deals.
Under the scheme, savings will be boosted by up to 25% by the Government, with the intention of supporting those who are saving for a deposit to get on to the first rung of the property ladder.
At 4%, the most eye-catching deal so far has been from Halifax, Britain’s biggest mortgage lender.
Of the other accounts announced, most are offering a more modest 2% interest, still quite a jump from the typical easy access ISA at 1.09%.
Whichever provider first-time buyers opt for, they needn’t stick with the same people when it comes to getting a mortgage, cautions Charlotte Nelson at Moneyfacts.co.uk.
“Savers should remember that opting for a Help To Buy ISA with a provider does not mean that they have to take out a mortgage with them.
“When the time comes, they would be wise to look at the whole mortgage market first, to ensure they get the best deal.
“Another factor to bear in mind is that increasing house prices could mean that minimum deposit requirements may soon exceed the maximum that can be saved in these accounts.
“However, savers will still be benefiting from some of the best ISA rates around, as well as a significant boost from the Government.
“Finally, it’s also important to point out that all of these ISA rates are variable, which means that they won’t stay at this competitive level forever.
“Anyone considering these deals should therefore act fast to benefit from the current offers.”