West Brom Building Society has launched a Help to Buy ISA – a type of savings account designed to help savers get together a deposit for their first home.
Savers can deposit £1,200 in the account in the first month, followed by up to £200 in subsequent months.
Not only are the returns from the account tax-free, but the government will also top up the balance by 25%, up to a maximum of £3,000, if the money is put towards a deposit.
In addition, if you are buying with a friend or partner they can open a Help to Buy ISA too and enjoy the government bonus as well.
However, the Help to Buy ISA is only available to people that have never opened a property before. Any property they do wish to buy must cost £250,000 or less, unless it is in London in which case the cap increases to £450,000.
West Brom’s ISA pays a rate of 2% AER variable and can be opened in any branch. Transfers in from other ISAs are accepted.
Sophie Dwyer, product manager for savings at West Brom, said the mutual had a “good track record” of lending to first-time buyers so adding to a Help to Buy ISA to its portfolio was a logical next step.
She continued: “It means we can offer assistance to those customers who want to get onto the property ladder but still need time to save the necessary funds for a deposit.
“If they can secure an additional contribution from the government, as well as a competitive rate of interest, then hopefully that savings goal can be achieved a little more quickly.”
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