Halifax Help To Buy ISA rate dropping!

Klopek · 30 April 2016 at 9:48PM

Looks like Halifax limit transfers from existing ISAs to £1000, whereas Santander allow the full £1200 to be transferred in.

I therefore intend to open a Santander HtB ISA but had wondered whether I should also open a Halifax HtB ISA to qualify for the current 4% rate. I would only be paying into one cash ISA (Santander) but should the variable rate drop, I would have the chance of transferring into the Halifax account (assuming the existing customer rate hadn't been reduced).

There seems to be some conflicting information about whether simply opening an account or paying money into it technically counts as your current years subscription. Does anybody have experience of this?

MDMD · 30 April 2016 at 10:06PM

Klopek wrote: »

Looks like Halifax limit transfers from existing ISAs to £1000, whereas Santander allow the full £1200 to be transferred in.

I therefore intend to open a Santander HtB ISA but had wondered whether I should also open a Halifax HtB ISA to qualify for the current 4% rate. I would only be paying into one cash ISA (Santander) but should the variable rate drop, I would have the chance of transferring into the Halifax account (assuming the existing customer rate hadn't been reduced).

There seems to be some conflicting information about whether simply opening an account or paying money into it technically counts as your current years subscription. Does anybody have experience of this?

Ordinarily opening an ISA won't count as a subscription, it's paying into one that counts. Unfortunately the rules are different for HtB ISAs - you can only hold one of them at once, it's irrelevant whether you have paid into just one. If you open another one you must transfer your existing one in and close it,

https://www.helptobuy.gov.uk/help-to-buy-isa/faq/#bb8e24ea-e1f7-648f-8ce9-ff0000ad17aa

Plus · 30 April 2016 at 10:16PM

So the fun may come when Halifax drop the rate for existing customers, and everyone decides to stampede out (assuming someone else is giving a better rate). Their ISA transfer department is swamped, the transfer takes longer than a month, and people start missing their monthly payments due to being in limbo between two providers. Then the complaints process backs up even further.

I hope it won't come to that, but we've been here before (hello H-L...)

glider3560 · 1 May 2016 at 8:20AM

Plus wrote: »

So the fun may come when Halifax drop the rate for existing customers, and everyone decides to stampede out (assuming someone else is giving a better rate). Their ISA transfer department is swamped, the transfer takes longer than a month, and people start missing their monthly payments due to being in limbo between two providers. Then the complaints process backs up even further.

This reminds of the annual ISA 'rush' every March/April that happened until 2007/2008. Barclays launching the 6.5% Tax Haven ISA springs to mind...

Sparx8 · 1 May 2016 at 4:40PM

Hi guys ive just opened the Halifax HTB isa !
Am I just being thick because I can't seem to log in and put the 1k initial deposit in . Says I need to wait for a activation code through the post ! Any ideas ?

Westie983 · 1 May 2016 at 5:00PM

pay the first payment over the counter, or via standing order from another bank account that you do have internet access with,
You will need the activation code to finish the online banking registration with Halifax.

Rich2808 · 1 May 2016 at 11:24PM

Seems a crazy policy change.

Isn't the whole point being this is a loss leader to attract mortgage business - as they think people with HTB isas will pick the same bank fir their mortgage. Many people will pay more interest in a month on a mortgage than they will get forever in a HTB isa.

colsten · 2 May 2016 at 12:00AM

Rich2808 wrote: »

Seems a crazy policy change.

Isn't the whole point being this is a loss leader to attract mortgage business - as they think people with HTB isas will pick the same bank fir their mortgage. Many people will pay more interest in a month on a mortgage than they will get forever in a HTB isa.

It's not crazy at all - any responsible ISA manager will have limits to how much interest they can pay on existing and expected deposits.

There is nil guarantee that the HTB ISA holders will take out a mortgage with Halifax at some point in the future, or any mortgage at all. Expected future mortgage business can therefore at best be a soft factor in the considerations the ISA manager makes. Interest payments, on the other hand, are a hard commitment.

PeacefulWaters · 2 May 2016 at 5:07AM

Rich2808 wrote: »

Seems a crazy policy change.

The only thing crazy was paying 4% when the going rate elsewhere is 2%.

Isn't the whole point being this is a loss leader to attract mortgage business

It remains a loss leader at 2.25%. It's a totally uneconomic loss leader at 4.00%.

as they think people with HTB isas will pick the same bank fir their mortgage.

But there's no requirement to stick with Halifax for the mortgage. The days of saving with your future lender and not shopping around for a mortgage disappeared a generation ago. And they know this.

Many people will pay more interest in a month on a mortgage than they will get forever in a HTB isa.

What you're missing is the basics of a high street mortgage lender. They've cornered 75% of the Help to Buy ISA market. They (LBG) have been reducing the size of their savings and mortgage book for years - they have no appetite whatsoever to corner 75% of the first time buyer market. Higher risk borrowers with less equity means lower share price.

Flobberchops · 2 May 2016 at 4:10PM

Sparx8 wrote: »

Hi guys ive just opened the Halifax HTB isa !
Am I just being thick because I can't seem to log in and put the 1k initial deposit in . Says I need to wait for a activation code through the post ! Any ideas ?

Like Westie said - the activation code is for online banking. If you've been supplied with a sort code and account number you can pay in the deposit (and the first month's £200 S/O) straight away.

Remember that all funds after the deposit must be as a standing order! Also beware of transferring across a small amount "just to check if it works" and then attempting to top it up to £1000, as some others have tried. Halifax give you one shot only at the initial deposit.

Halifax Help To Buy ISA rate dropping!

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