help 2 buy isa

phil22

as this launches soon, me and my partner want to try save by next summer, even if its later than that its fine, so say we put in £1000 per month, is this do able, i know a lot of the faqs on the isa seem to indicate based on putting £200 in per month for 5 years, we will litrally be saving everything we have, i know i sound stupid but you can put in asmuch as you want each month cant you so once we have it all in next year we can put our deposit on a house? so if we save £6000 the government put in £1500 ? thanks

eskbanker

phil22 wrote: »

say we put in £1000 per month, is this do able, i know a lot of the faqs on the isa seem to indicate based on putting £200 in per month

No, £1000 per month isn't doable, the maximum monthly contribution is £200 (except the first month, when you can pay in £1,200). That's £200 per person though, so you can save up to £400 per month for a couple.

phil22

is that the first month i open the isa doesent have to be december? why dont they let you put so much in? so cant i save my money in my normal bank then just add £400 per month into the help to buy aswell as the first month at £1200 , then my normal bank account i can save the money in so i can potenitally buy a house next year? if i open the isa and me and my partner put 200 each in what proof do they need that its 2 of us putting that in each ?

its just it would take so much longer, so in that case if we opened a different normal isa , (are the other isas available you allowed to put in asmuch as you want) if we did that we would still qualify for the help 2 buy mortgage wouldnt we if we didnt have the isa, i know i can only open 1 isa

Archi_Bald

There is an HTB ISA FAQ: http://www.helptobuy.gov.uk/help-to-buy-isa/faq

Saving in a normal ISA is not a good idea if you need your cash in the next 5 or so years. You can get much better interest in other accounts - see best savings accounts and/or other posts on the forum.

phil22

I will have a look, aslong as theres isas i can get money out next year and can save atleast 1k a month, unless i just save it in my bank

Archi_Bald

Saving in a normal ISA is not a good idea if you need your cash in the next 5 or so years. You can get much better interest in other accounts - see best savings accounts and/or other posts on the forum.

eskbanker

phil22 wrote: »

if i open the isa and me and my partner put 200 each in what proof do they need that its 2 of us putting that in each ?

[...]

i know i can only open 1 isa

The I in ISA stands for Individual, i.e. you can't have a joint account. However, both you and your partner can open an HTB ISA each and put up to £200 per month into each one.

It would be worth reading through some of the MSE guides linked from further up the page to get up to speed with different ways of saving, including http://www.moneysavingexpert.com/savings/which-saving-account and http://www.moneysavingexpert.com/savings/help-to-buy-ISA

Flobberchops

The Help to Buy ISA is a cash ISA and all the usual restrictions apply, so bear that in mind if you've already subscribed to a cash ISA this year. You can still hold a Stocks and Shares ISA alongside it.

Yes, the monthly cap does seem rather low; £200 a month aside from the first month which can be up to £1200 (which btw doesn't have to be one lump sum but DOES all have to hit the account within the calendar month you open it. So try to open the H2B ISA at the start of a month rather than toward the end).

The government will add £50 for every £200 invested up to a maximum of £3000 per person. If you're buying a house with a partner you can each open a H2BISA and pool your cash but all the eligibility restrictions apply, so I believe you both need to be first-time buyers.

Given the fact that we don't know what kind of interest rates these ISAs will have, I'm a bit cautious about these. The 25% gov bonus is tempting (but worth noting its only applied when the account is closed, so no sky-high compound interest) but the downsides include a relatively low cap to gov contributions, restrictions on the house value, and the fact that it would involve you (and your partner) tying up your cash ISA facilities for several consecutive years.

My feeling is that this is a good product for lower-income singles or couples who haven't saved much in the past, but higher-income people who could be saving £500+/mo might be better off taking matters into their own hands. The interest rates, when announced, *might* make it more attractive, but I'm going to stick my neck out and guess they'll be sub-2%

redux

Flobberchops wrote: »

Given the fact that we don't know what kind of interest rates these ISAs will have, I'm a bit cautious about these. The 25% gov bonus is tempting (but worth noting its only applied when the account is closed, so no sky-high compound interest) ...

It works out equivalent to fairly high.

Playing with a monthly savings calculator, to add 25% to 5 years of £200 a month would need about 8.5% per annum

phil22

If i dont have a htb isa i can still do the htb mortgage 20% cant i? My partner opened a isa in april i think but i havnt, so if we both open one each and put 200 ourself and 200 the other person into EACH one we can save £800? Is that what you meant, it still is low but if i did that i can always keep money in my bank left over and just save it up normally through my own bank account?

eskbanker

phil22 wrote: »

if we both open one each and put 200 ourself and 200 the other person into EACH one we can save £800? Is that what you meant

No! The maximum contribution into each account is £200 per month so the most a couple can save into HTB ISAs is £400 per month, as per post #2.