The government has opened a consultation on a proposed new First Time Buyer ISA. It is not yet a live product, and the final rules have not been confirmed. The consultation was updated on 29 June 2026 and is open until 11:59pm on 18 August 2026.
For anyone saving for a first home, the proposal is worth understanding, but it should not replace practical planning around your deposit, mortgage affordability and purchase costs.
What is being proposed?
The proposed First Time Buyer ISA is intended to replace the Lifetime ISA for future first-time buyers once it becomes available. Until then, it remains possible to open a Lifetime ISA, and existing Lifetime ISA holders will be able to continue saving into their account under the current rules.
The new account would be used solely for buying a first home. It would include a government bonus paid when you withdraw funds for an eligible property purchase. Under the proposal, there would be no withdrawal charge if your circumstances change and you need to access your own money for another reason, although the government bonus would only be available for a qualifying home purchase.
Key points to check
| Area | Current proposal | What this means for buyers |
|---|---|---|
| Product status | Consultation only | Do not rely on it as a guaranteed product yet |
| Bonus | Based on net subscriptions, not interest or investment growth | Final benefit depends on rules still to be confirmed |
| Property use | First home purchase only | It is not designed for general saving or buy-to-let purchases |
| Mortgage requirement | Property must be bought with a legal mortgage | Cash-only purchases would not qualify for the bonus |
| Limits and price cap | Not yet confirmed | Wait for final rules before planning around exact figures |
How could it affect your deposit?
The bonus is proposed to be based on what you pay into the account, minus any withdrawals made before claiming the bonus. It would not be calculated on interest or investment growth. Cash and stocks and shares versions are being considered.
The final subscription limit, government bonus level and property price cap have not yet been confirmed. These are expected at a future fiscal event. You should not build a purchase plan around an assumed bonus amount.
Your deposit planning should still include your own savings, legal fees, survey costs, mortgage fees, removal costs and an allowance for moving into the property. If you are planning your first purchase, first-time buyer mortgage advice can help you understand how your deposit, income and credit profile may be assessed.
What should you check now?
Before relying on any ISA product, check whether the property would be eligible, whether you need a legal mortgage, how long the account must be open and how the bonus would be claimed.
You may also want to review your wider mortgage options, read the buyers advice page and understand why you might use a mortgage broker. If you are unsure about terms such as loan-to-value, affordability or agreement in principle, the mortgage jargon buster may help.
Do not forget the wider purchase process
Your deposit is only 1 part of buying a home. A lender will still assess affordability, credit history, income evidence and the property itself.
You may also need conveyancing, suitable home insurance and, depending on your circumstances, life insurance, critical illness cover or income protection. Protection policies have terms, conditions, exclusions and eligibility requirements, so review the details carefully before applying.
FAQs
Is the First Time Buyer ISA available now?
No. It is currently a government proposal under consultation, so the final rules and launch timing are not confirmed.
Will it replace the Lifetime ISA?
The government says the new product will be offered in place of the Lifetime ISA once available, while existing Lifetime ISA savers can continue under current rules.
Can I use it without a mortgage?
Under the proposal, the bonus would only be available where the property is bought with a legal mortgage.
Should I stop saving now?
Not automatically. Your decision should depend on your timescale, eligibility, existing savings and wider financial position.
Can Alexandra Hamilton help me plan?
You can submit a mortgage enquiry or contact Alexandra Hamilton to discuss your circumstances. Any recommendation would depend on your needs, affordability and available products.
Important information
Your property may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances and will be agreed with you before proceeding, but we estimate this to be £995.
The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages.
