First-time buyers have ONE MONTH to open a Help to Buy Isa before scheme closes forever

TIME is running out for first-time buyers to open a Help to Buy Isa and get up to £3,000 free cash.

The government scheme - which offers savers a 25 per cent bonus to help them get on the property ladder - is closing on November 30.

That means you just over one month to open your Help to Buy Isa account before the scheme closes forever.

It will be replaced by the Lifetime Isa, which can be opened by Brits aged between 18 and 39 to save towards a home or their retirement.

Here’s what you need to know about the Help to Buy scheme, how to apply and why it is being scrapped.

What is a Help to Buy Isa?

The government-backed Help to Buy Isa tops up your savings help you buy your first home.

Your savings are boosted by 25 per cent, so if you deposit £200 the government will add £50 to your savings, up to a maximum total top up of £3,000.

You can also earn interest on top of whatever you save - but rates vary depending on your bank.

You can deposit up to £1,200  in the first month, and after that the maximum you can save each month is £200.

Yo'llu need to save at least £1,600 before the government will start topping up your savings.

Once you’ve saved up, you can only use the money towards a house with a purchase price of up to £250,000, or £450,000 in London.

The cash never actually reaches your account but instead goes straight to your solicitors and is tied up in the purchase transaction.

It must be used towards your deposit or to cover the legal fees, such as solicitor's charges or stamp duty.

The Help to Buy scheme has attracted controversy, with some claiming the scheme only benefits the rich and has driven up house prices.

Official figures showed that the average earnings of someone who claimed the bonus earned £55,000 a year.

Why was the Help to Buy Isa scrapped and what is replacing it?

The government has decided to scrap the scheme in favour of the Lifetime Isa (Lisa) which lets you save money towards your first home or retirement.

You can only open a Help to Buy Isa until November 30, 2019, and if you've already got an account you can keep saving into it until November 30, 2029.

Once the Help to Buy scheme closes, only the Lisa scheme will be available to help first-time buys.

The Lisa also lets you deposit your savings in lump sums, rather than having a £200 monthly deposit limit.

Not many banks and building societies offer the Lisa though, so the interest rates on them aren't great - you'll earn more interest on a Help to Buy Isa.

Saving the maximum amount in a Lisa for 32 years would net you £32,000 of free government cash, which is more than you can get under the Help to Buy Isa.

Saving with a Lisa could get you £32,000 free cash, compared to just £3,000 under the Help to Buy Isa.

You can also buy a pricier house, with homes of under £450,000 or more available to first-time buyers with a Lisa.

But unlike the Help to Buy Isa, you can only withdraw cash to either buy your first home or when you reach 60.