This week it was announced that more than one million Help to Buy ISAs have been opened since the scheme was launched in 2015, helping many save towards their first home. Help to Buy ISAs are a great option for first time buyers who want to save for a mortgage deposit. You can earn up to 2.27% interest tax-free and the government will then add 25% to the saved amount.

In total, people saving for their first home have saved more than £1.8 billion between them since the scheme began. Speaking about the scheme this week, Stephen Barclay, Secretary to the Treasury explained why it has been so popular:

“Our Help to Buy schemes continue to prove hugely popular across the country, as we support people to get on in life and achieve their dream of climbing the housing ladder.”

The scheme has been very successful, with an average of 1,500 Help to Buy ISAs being opened every day since the scheme was introduced. The scheme is provided by a number of different banks and building societies and since its launch the number of providers that savers can choose from has doubled to 28.

The scheme is open to first-time buyers across the UK who can open an ISA for home purchases up to £250,000 (or £450,000 if you are in London). If you want to buy your home as a joint purchase with someone else who also qualifies for the scheme then you can both save and claim separately for the bonuses on your savings. If you’re a first-time buyer, buying with someone who has owned a property before, you can open one but they can’t.

You can save £1,200 in the first month and then £200 a month after that. The most that can be paid out as a bonus is £3,000 (on a saving of £12,000). The minimum amount that the government will pay out on is £1,600. First-time buyers will be able to open a Help to buy ISA until 30 November 2019 but the bonus scheme is set to keep paying out on Help to Buy ISA savings until December 2030. So you could put in just a small amount per month and take years to build up your bonus. However, this does carry the risk of a future government changing the rules before 2030, meaning they’ll stop paying bonuses.

Thinking of getting a Help to Buy ISA? Money Saving Expert has more excellent, up-to-date detailed information about them on his website: www.moneysavingexpert.com.