Virgin Help to buy ISA (Review)
What is the Virgin Help to buy ISA?
The Virgin help to buy ISA is a Virgin savings product which is offered by Virgin as part of the government’s first-time buyer help to buy scheme. The terms of the Virgin help to buy ISA are dictated by the government and can change at any time.
You should check the help to buy ISA website for any recent changes.
The government will pay a bonus of 25% on your closing balance when you buy a home. The maximum bonus you can earn with the Virgin help to buy ISA is £3,000 as the government will only pay a bonus on a maximum savings of £12,000.
It is important to note that you cannot use your Virgin help to buy ISA towards your mortgage deposit as it is only paid after you have completed on a home purchase.
With the Virgin, help to buy ISA and inline with the Governments own Help to buy ISA rules you can only save a maximum of £1,200 in your first month and then a maximum of £200 per month going forward.
The interest paid on the Virgin help to buy ISA may be a variable rate and this means it could change at any time.
The interest paid is separate from the government bonus you are eligible for on your help to buy ISA
Help to buy ISAs will end in November 2019 and you must claim your bonus by December 2030.
What are the eligibility requirements of the Virgin help to buy ISA?
To be eligible for the Virgin help to buy ISA you will need to meet the following requirements:
- You must be over 16 years of age to be eligible for a Virgin help to buy ISA
- You have not and will not go over your tax year ISA allowance. It is £20k for the 2019/2020 tax year
- You cannot have another hep to buy ISA except you are closing your current help to buy ISA and transferring it to your Virgin help to buy ISA
- You must have a national insurance number
- You are a resident in the UK or can prove established residency via your tax obligations or through marriage or civil partnership with a UK resident
- You cannot have another cash ISA in the same tax year except it is held with Virgin. For tax purposes, the Virgin will present all your ISAs as one. This is known as a portfolio ISA.
- You don’t own any land or house anywhere in the world
- You have not already received a help to buy ISA bonus except you have and it has been paid back to the relevant body due to your home purchase falling through and not being completed.
- You cannot use the help to buy ISA if you intend to rent out the property
- The maximum property price you can use the help to buy ISA on is £450,000 within London and £250,000 outside London
- The Virgin help to buy account can only have one holder
What can you do with your Virgin Help to buy ISA?
Once your savings have reached the minimum amount of £1600 you can then withdraw your Virgin help to buy ISA savings.
The interest paid on your Virgin help to buy ISA counts towards your savings balance and you will be able to withdraw this too.
You may be able to make withdrawals from your Virgin help to buy ISA but you will only be able to pay back in your monthly maximum of £200.
You can use the Virgin help to buy ISA for shared ownership and joint ownership properties.
It will take over four and a half years to qualify for the maximum bonus of £3,000 if you save the maximum £12,000 to reach there
Can I transfer an existing ISA to a Virgin help to buy ISA?
Yes, you can transfer an existing help to buy ISA to a Virgin help to buy ISA but your previous ISA will have to be transferred in full and closed.
If you hold a cash ISA with Virgin you can only transfer up to your monthly allowance into your Virgin help to buy ISA.
If you have a cash ISA with another provider with a balance bigger than your monthly Virgin help to buy ISA allowance then you will only be allowed to transfer the maximum opening amount of £1,200 and then £200 per month.
You will need to close your current cash ISA and transfer it to a Virgin cash ISA if any balance still remains which is bigger than your monthly Virgin help to buy ISA contribution allowance.
You can transfer a cash ISA from a previous tax year into your help to buy ISA but the monthly maximum contributions still count and as this ISA is from a previous tax year it will not affect your personal allowance for the current tax year.
You will have to submit a help to buy transfer request form to your existing provider and Virgin
How to cancel your Virgin Help to buy ISA?
You have 14 days from when you opened( or received your contractual documents for) your Virgin help to buy ISA to close it.
This is known as the cooling off period. If you cancel your Virgin help to buy ISA within this period you will be repaid any deposit plus interest earned in full.
You must make your ISA cancellation request in writing to the specific branch you got your ISA in or via email.
If you don’t cancel your Virgin help to buy ISA within 14 days you will be bound by their terms and conditions.
If you have a complaint about the Virgin help to buy ISA, please find the appropriate complaints channel and make a complaint.
Remember the ISA is a savings product and is covered by the financial services compensation scheme
How do you close your Virgin Help to buy ISA and claim your bonus?
Below are the steps you will need to take to close your Virgin help to buy ISA and claim your government bonus.
- Once you are ready to buy your home, simply let Virgin know and they will close your Help to buy ISA account. Your Virgin help to buy ISA account must be closed before you make a claim for the government’s bonus.
- Once you have closed your account Virgin will transfer your account to a none help to buy ISA account and then provide you with a closure document as well as a closure statement. Your conveyancer will need the closure document to claim your help to buy government bonus.
- Your conveyancer will then submit documents to claim the bonus from the Government
- Your help to buy ISA bonus will be paid on the last balance on your Virgin help to buy ISA account before it became a £0 balance account. You should avoid making any withdrawals prior to this point to avoid reducing the balance on which you are eligible for the government bonus.
- The government bonus is paid towards your home purchase completion costs and not your mortgage deposit.
- The closure process can take up to 2 weeks and you have 12 months from when you closed your Virgin help to buy ISA account to claim the government bonus.
Is a help to buy ISA the right answer for you? Will a lifetime ISA be of better value considering it offers a £1,000 government bonus per year if you save the maximum £4,000 per year? These are things you should consider.
Help to buy ISA calculator
You can use our help to buy ISA calculator to work out what your estimated earnings could look like based on your monthly contributions.
Virgin Help to buy ISA product features
|Headline interest rate||2.5% AER|
|Headline interest balance||£1|
|Minimum initial deposit||£1|
|Notice and penalty charge||There is no notice required and there is no penalty or charge is made for withdrawals.|
|Free withdrawal conditions||There are no withdrawal conditions|
|Availability restrictions||This product is only available for first-time home buyers|
|Interest payment frequency||monthly|
|Standing order||Not available or allowed|
|Additional deposits||Not available or allowed|
Disclaimer: please check for up to date information as this data may now be out of date.
Other government schemes you may be eligible for:
You may also be able to use a host of government schemes to increase your mortgage deposit or reduce your total cost of purchasing a home.
The government schemes you may be able to use include:
- Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
- Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
- Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
- Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
- Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
- Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
- Right to buy- allows you to buy your home at a discount price.
- Preserved right to buy– same as above.
- Right to acquire- same as above.
- Rent to buy- This allows you to rent at up to 20% under market value. You have the option to purchase the home within 5 years.
You may also be able to use a host of mortgages with the help of your family.
They are a certain type of mortgage known as a family springboard mortgage, they include mortgages from lenders such as the Barclays family springboard mortgage, the lloyds lend a hand mortgage or the post office family link mortgage.
Your property ladder plan:
It seems you are in the early stages of planning your property ladder journey.
About Huuti: Huuti builds personalised plans for your money goals.
Our property ladder plan will:
- Show you your complete mortgage affordability from a lenders point of view
- Show you which private market and government schemes you are eligible for (which save time and money)
- Show you how much you need to put away each month and help you build your mortgage deposit
- Help build your credit score to improve your mortgage affordability
- Match you with potential co-buyers to shorten your timeline on to the property ladder
- Show you what mortgages you are eligible for, how much they will cost and help you get a mortgage.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.