When everyone has a home

Housing advice for Northern Ireland

Lifetime ISA and government help to buy scheme

The government’s Help to Buy initiatives included access to mortgages for those people who only have a 5% mortgage and a savings bonus scheme for people saving for a deposit on their first home. Some of these schemes have now ended.

  • The mortgage guarantee scheme closed to new applicants in 2016.
  • From 1 December 2019. it will no longer be possible to open a Help to Buy ISA
  • You can still open a Lifetime ISA to help towards the cost of buying your first home or the cost of retirement.

Help to buy scheme

This scheme intends to make it easier for people who only have a 5% deposit to buy a house.  The government offers a guarantee to lenders that they will insure 15% of the value of the mortgage if the home buyer fails to pay and the property is repossessed. This mortgage guarantee scheme closed to new applicants in December 2016, but many lenders continue to provide 95% mortgages. A 95% mortgage will normally have much higher interest rates and can also be a risky prospect as the borrower could end up owing more than the property is worth if the value of their home falls even slightly.  It may be worth thinking about finding a more affordable home or trying to save a larger deposit before you commit to buying a property. 

Help to buy and Lifetime ISAs

People who have a Help to Buy ISA will receive a government bonus to put towards the cost of buying a first home. The amount of the bonus depends on how much the person has saved in his or her ISA. You will no longer be able to open a Help to Buy ISA from 1 December 2019, but existing accounts will remain open. 

If you cannot open a Help to Buy ISA, you can apply to open a Lifetime ISA. The Government will give you a bonus worth 25% of what you pay into a Lifetime ISA every tax year. The bonus is paid in monthly, and the maximum bonus is £1,000 in a tax year.  

You need to be aged between 18 and 40 to open a Lifetime ISA and may have to meet other eligibility conditions, depending on your own lender's policies. If you intend to use the bonus payments to help with the cost of buying a home, certain conditions apply. These are

  • you must be a first time buyer who has never owned a home in the UK or anywhere else before
  • your property cannot cost more than £450,000
  • you must intend living in the property you want to buy
  • you have to use a traditional repayment mortgage to finance the purchase. 

Getting financial advice

It's important to get trustworthy, independent financial advice if you are thinking about buying somewhere to live. This is a huge financial commitment and may not be the most suitable housing option for you.