Lloyds Bank, Barclays and Santander have all revealed the interest rates they will pay prospective homeowners on the new Help to Buy ISA.
Barclays said it will pay an interest rate of 2.25%, while Lloyds is offering a rate of 2%.
Santander will offer a preferential rate of 2.00% for all Santander 123, World and Select customers and 1.50% for all other customers.
Barclays said customers will be able to open an account in branch or by telephone from 17 December.
The rates are in line with those offered by Nationwide, HSBC and NatWest, but below the 4% being offered by Halifax.
Starting on 1 December, the scheme gives first-time buyers saving for a deposit the opportunity to put away £200 a month in a dedicated ISA that the government will top up by 25%, up to a maximum of £3,000.
First-time buyers can also open their account with a one-off lump sum of up to £1,000 in addition to the monthly maximum, while couples buying together will be able to combine their bonuses, meaning a potential boost of up to £6,000 towards a deposit for a first home.
Critics have warned that the Help to Buy ISA fails to provide a solution to the ongoing housing crisis and could in fact fuel a further increase in house prices by pushing up demand due to the lack of supply.
David Ingram, founder of mortgage adviser directory MyLocalMortgage.co.uk, said: “As the scheme has only just launched, only time will tell whether its effects will be positive or negative. However, there is little doubt that it gives first-time buyers a much needed incentive to kick-start their savings and get themselves on the property ladder.
“It may not appear to be much, but when it comes to saving for a deposit along with the other expenses of purchasing a home, a little extra help can go a long way for first-time buyers. Once you start renting a place, it can be extremely hard to keep up with payments and put enough aside to save for a house deposit. So, the more people we can free from the renting cycle the better, in my opinion.”
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