Help to buy ISA 4%

colsten

jimjames wrote: »

I'm wondering if there is any obligation to buy a house or to be a first time buyer to open an account? If not then it could be a cash ISA worth having for anyone at 4% tax free. 25% government bonus wouldn't be obtained but you still get 4% interest.

There is no obligation to buy a house but

1. I believe you need to sign a declaration that you are an FTB when applying for the HTB ISA
2. the amount you can deposit is relatively low. You can put a total of £800 into 6% Regular Saver accounts, and from next April, probably get the interest tax free

colsten

savings_my_hobby wrote: »

In my view, the help to buy isa would be worth having even if the the interest was negligible, 25% bonus is a huge incentive. Im not sure how far £3000 will get you in terms of fees and surveyors costs but it will pay for something and whatever that is its one less thing to pay for.

Agreed, the bonus is huge, and no qualifying FTB should turn the HTB ISA down. Anyone who isn't quite sure whether a free £3,000 towards the purchase of their first property is worth it should ask themselves how long they'd need to work to have £3,000 net.

Masomnia

Planning (hoping!) to buy in 5 - 10 years so I think I'll be getting one. 4% is a good rate. Not checked out all the Ts & Cs yet but it looks like there's little to lose.

bowlhead99

jimjames wrote: »

I'm wondering if there is any obligation to buy a house or to be a first time buyer to open an account? If not then it could be a cash ISA worth having for anyone at 4% tax free. 25% government bonus wouldn't be obtained but you still get 4% interest.

While details from the providers are somewhat lacking, I read the initial scheme outline published with the March budget, there were eligibility rules and limits for each stage of the process:
- opening the account
- saving into the account
- getting the bonus
- using the bonus to buy a house

At the 'opening the account' stage the key points were:
- the ISA is only available for first time buyers
- each first time buyer can only open one HTB ISA during the lifetime of the scheme

So, while that document didn't actually define first time buyers (which now seems to have been clarified as someone who's never owned an interest in a residential property in any country), seems like someone who already owns a property now is not going to be able to open a HTBISA now. However, if you were willing to lie on the application, not clear how they would know to turn you down.

I'd wondered if, potentially, if you expected to 'qualify as first time buyer' in say five years time (e.g. if FTB was someone without a property and who hadn't been a property owner in last X years) then perhaps you could get a HTBISA now and not cash in and ask for govt funds until you qualified?

But the overview literature from the government said (without definitions) that you would have to be a FTB to even open the account. And it's now being reported (I haven't bothered looking up the primary legislation) that having owning a piece of residential property at any time in the past will disbar you from calling yourself a FTB.

No doubt all will be clear in the small print once these things are actually available. You can see that banks would be happy to offer premium rates on them, like they do with some current accounts to get your business, as the actual amounts of cash they would need to be paying out on are relatively small compared to 'normal' ISAs and general savings.

RadHead

Hi all,

I've just got a query about this new ISA and was wondering if someone can iron it out for me.

My interpretation of all the literature released so far is that if I put the maximum amount of money in at every occasion (inital 1200 in Dec plus 200 per month thereafter), it would take 4.5years to fill with 12000 to get the full bonus and any interested earned by the account would just be an addition.

The 'this is money' website seems to suggest that the full bonus is achievable in less than 4.5years because the interest generated from the money in the account counts towards the 12000 and as such it could be done in 4 years 2 months (assuming the rate stays constant).

Could someone just confirm to me that the info from 'this is money' is correct (although I'm almost sure it is).

Also just as a side question, should the interest rate on the halifax account fall, could I just transfer the balance to another HTB ISA at any time or would I have to wait to the new financial year?

Thanks all who reply in advance.

YorkshireBoy

RadHead wrote: »

Hi all,

I've just got a query about this new ISA and was wondering if someone can iron it out for me.

My interpretation of all the literature released so far is that if I put the maximum amount of money in at every occasion (inital 1200 in Dec plus 200 per month thereafter), it would take 4.5years to fill with 12000 to get the full bonus and any interested earned by the account would just be an addition.

The 'this is money' website seems to suggest that the full bonus is achievable in less than 4.5years because the interest generated from the money in the account counts towards the 12000 and as such it could be done in 4 years 2 months (assuming the rate stays constant).

Could someone just confirm to me that the info from 'this is money' is correct (although I'm almost sure it is).

Also just as a side question, should the interest rate on the halifax account fall, could I just transfer the balance to another HTB ISA at any time or would I have to wait to the new financial year?

Thanks all who reply in advance.

Click the link in the first post in this thread. Points 5 & 6 therein will answer your questions. The rest is useful reading anyway.

colsten

bowlhead99 wrote: »

So, while that document didn't actually define first time buyers (which now seems to have been clarified as someone who's never owned an interest in a residential property in any country), seems like someone who already owns a property now is not going to be able to open a HTBISA now. However, if you were willing to lie on the application, not clear how they would know to turn you down.

More on this here: http://forums.moneysavingexpert.com/showpost.php?p=69616246&postcount=18

Flobberchops

Wahey, 4% is a lot better than I was expecting. I'm almost certainly going to jump on one of these - need to squirrel away £1200 first to take advantage of the first month but that's a great offer.

What would REALLY make my day is if the Halifax H2B ISA counts as a qualifying cash ISA to bump my daughter's JISA up to 4%.

colsten

Flobberchops wrote: »

What would REALLY make my day is if the Halifax H2B ISA counts as a qualifying cash ISA to bump my daughter's JISA up to 4%.

I can't see why it wouldn't, as the HTB ISA should qualify as an "adult Halifax Cash ISA".

veryintrigued

colsten wrote: »

I can't see why it wouldn't, as the HTB ISA should qualify as an "adult Halifax Cash ISA".

Probably telling you to suck eggs but looking at the blurb you need to be a minimum of 16.

Gives young adults a very decent option if you're around that age IMO.