The first saver to use a Nationwide Help to Buy ISA has completed on their mortgage, the building society has announced.
The first-time buyer, from Northampton, claimed the minimum £400 government bonus, with other Nationwide savers set to follow suit, claiming various cashback and bonuses.
The Help to Buy ISA, launched on 1 December, is available to first-time buyers only and means that for every £200 saved into the account, £50 is paid by the Government as a mortgage bonus.
First time buyers who use a Help to Buy ISA must have a minimum balance of £1,600 to qualify for the bonus, but are eligible for a bonus of up to £3,000.
Nationwide said of those customers eligible to claim after opening their accounts on 1 December, more than 40 Help to Buy ISA savers had already closed their balance to claim their government bonus.
They include the new homeowner in Northampton, whose mortgage completed on Friday (5 February) with another four join applicants, from Glasgow and Derby respectively, due to complete within the next week.
Of those, one couple who have made a Nationwide Save to Buy mortgage application have been able to access the maximum total of £1,750 available to the building society’s Help to Buy ISA customers in cashbacks and bonus.
This is made up of a £500 cashback available to all Nationwide first-time buyers, another £250 cashback for all Nationwide Flex main current account holders and £1,000 available to existing savers through Nationwide’s Save to Buy scheme when taking a Save to Buy mortgage.
As joint first-time buyer mortgage applicants, both customers are also claiming £400 each in Help to Buy ISA bonus payments making a total of £2,550 in cashbacks and bonuses.
Nationwide Help to Buy ISA customers are eligible for its Save to Buy discounted mortgage range, with rates 0.20% lower than the main core range on mortgages with a 5-14.99% deposit.
Save to Buy is Nationwide’s existing initiative to help those saving for a deposit for their first home. The scheme gives customers access to a Nationwide mortgage of between 85.01% and 95% LTV, with extra cashback to those saving through the Help to Buy ISA.
Nationwide said in the first month of its Help to Buy account openings, more than half of the first-time buyer applicants (55%) were in the 25-35 age bracket, with a third (34%) aged 18-25.
Four in five maximised the amount they could contribute to the account in the first month only, depositing £1,000-1,200, with an average overall balance of £981. So far, a slightly higher number opened those accounts online (55%) than in a branch (45%)
The top five areas for Nationwide Help to Buy ISA account openings were Birmingham, Northampton, Reading, South West London and Bristol, and regionally it has proved most popular in the South East (22% of account openings) and Greater London (18%).
Andrew Baddeley-Chappell, Nationwide’s head of mortgages and savings policy, said: “These savvy borrowers have been quick off the mark in realising the benefits available under the scheme.
“Of course, those who save more and for longer can get an even larger bonus, but this first tranche of eager first-time buyers shows just how quickly the benefits can flow through the scheme.
“Adding in the potential cashback from Nationwide demonstrates the significant support available to those looking to get a first foot on the housing ladder.
“It shows that there is a clear reason for first time buyers always to open a Help to Buy ISA, irrespective of when they intend to buy, and especially if they can save the maximum monthly amounts to increase their government bonus.”