Help to Buy ISA

Hillgrovian6161

I'm looking to buy a property (for less than £250k) for the first time and have a Help to Buy ISA.  I can afford the full purchase price without a mortgage, but have been told that I need to take out a mortgage to be able to claim the 25% bonus on the ISA.  Is this right?  I can't find any reference to this on the Gov.uk website. If it is correct, any suggestions on how to make this work as inexpensively as possible?   It would be a shame for the bonus to all be eaten up by mortgage fees, valuation fees and interest etc.   

masonic

That is correct. The scheme was designed to help people afford a mortgage deposit. Cheapest option would be a small mortgage that could be paid off as early as possible, perhaps an offset mortgage on the right terms. Some have had success with a private mortgage arranged with a family member, but that requires an understanding solicitor.

eskbanker

Hillgrovian6161 said:

I'm looking to buy a property (for less than £250k) for the first time and have a Help to Buy ISA.  I can afford the full purchase price without a mortgage, but have been told that I need to take out a mortgage to be able to claim the 25% bonus on the ISA.  Is this right?  I can't find any reference to this on the Gov.uk website.

Given the scheme no longer being open to new applications, there's much less information online than there used to be, but the situation is confirmed within the official scheme rules, at 7.5.A.ii

[no bonus claim allowed unless] the Eligible Conveyancer is satisfied that:

(a) the Help to Buy: ISA Holder will be purchasing, whether solely or jointly, an Eligible Interest in Land;

(b) the purchase of that Eligible Interest in Land will be funded by a loan, which will be secured by a legal mortgage against that interest in land; 

https://www.helptobuyisaadmin.org.uk/lib/sites/default/files/scheme-rules-feb-2020_0.pdf (these used to be published on gov.uk pages and should still be visible on archived versions)