First time buyer saving & help to buy isas..

john11367

Hi all,

Long story short I'm trying to save for my first house. Got approx £7.5k at the minute and saving usually in the region of £750 a month. Up until now I've just been using a pretty poor savings account which as of this month has had it's rate reduced to 0.5%.

I've had a look round and can obviously do better - I hastily opened a NS&I isa paying 1.5% however now I'm wondering should I cancel while still in cooloff.

I've seen a deal with nationwide for a Save to Buy ISA which pays 2%, I could also switch my current account to their Flexdirect account paying 5% for the first year on the first £2500 of my balance. I believe with the save to buy ISA it can help your chances of getting a mortgage through them when the time comes also.

My only concern is the new help to buy scheme, obviously if this comes in I'll happily pay £200 a month into it and the rest elsewhere, but if I open a nationwide ISA now am I right in thinking I can't then take advantage if/when these become available as my allowance for this tax year will be gone?

Any help appreciated, all very confusing!

masonic

If Nationwide offer a help to buy ISA, then they allow you to split your ISA subscriptions between their different ISA products, so that wouldn't be a problem if you stuck to Nationwide. I'd say there is a reasonable chance others will allow the same when the time comes, so I don't think you should worry about contributing to a cash ISA now. There are also other ways around the issue should you need them.

TSB Plus is a good partner to the Nationwide current account, so you can have a total of £4,500 earning 5% interest. Depending on how imminently you are planning to put in a mortgage application (presumably not too soon if you are interested in taking up a help to buy ISA), there are other current accounts you could spread the money around.

john11367

Excellent, thanks. The whole world of ISAs and account switching is new to me as to be honest I opened an account with the same bank as my parents years ago and have been there since, then just went to them for a savings account when the time came.

That's nice to know about the help to buy ISA, I'd hate to shoot myself in the foot down the line. I'll have a look into the TSB plus account also as 5% is a lot better than two!

You're correct in saying I'm in no particular hurry to buy, it's likely to be early to mid 2016 before I'm in a position to do so, so for now I am just knuckling down and trying to get a decent deposit together.

Assuming the help to buy scheme comes in as planned in Autumn that should still give me time to get a few months payments into the scheme to hopefully get a few hundred back when the time comes. May not be much and with the restrictions on payment I'll not be able to get full benefit from it, but it all helps!