HtB - Either Nationwide or Halifax?

awentford

I'm aware of how the HtB ISA's work and looking to open one this month but I'm not sure which way to go.

I'm thinking either the Halifax one as it's at 4% and then transfer around in the future to get the best rate.

Or

Get the Nationwide at 2% and open up their Save to Buy ISA where I put the minimum in (£50 a month I think) and get the benefits of this account as well.

Any extra savings would go in high interest current/savings accounts at 4-6%.

I'll be looking to buy in about 3 years and can definitely save at least £250 a month and put £1250 in at the start.

psychological

Morning!

I'm looking at Halifax too, the interest rate is pretty impressive. My bank (Barclays) only offering 2.25%.

I've not heard of the Save to Buy ISA from Nationwide but the link for that seems to be down, perhaps it's been replaced with the Help to Buy?

tain

I think a lot of people on here are saying that you should consider maxing out savings accounts first off, and only consider the additional split ISA thingy Nationwide are doing if you know you'll exceed them savings accounts.


First Direct allow you to save up to £3600 @ 6% if you also have a current account with them - that's better than any ISA Nationwide are offering (excluding HTB ISA).

tain

Thinking through my own situation...


We can save about £1600 a month between the two of us (wife and I).


Most possible savings in a year: £19,200


Total HTB ISA in the first year: £6800


Total regular savings with FD: £7200


So we have £5200 that wouldn't be in the highest interest accounts.


We need to work out, then - will the £6800 in Halifax's 4% ISA be worth more than £12,000 in Nationwide's split ISA thing?


My maths says we'd be better off with Nationwide, but I can't be sure of my maths. Plus if we don't save £1500 a month, and instead only save £1000, the whole dynamic could change.

colsten

With the amounts you mention, as basic rate tax payers, you will always be better off with Regular Savings accounts and with interest-paying current accounts as the Nationwide Save To Buy ISA will only pay 2% AER (EDIT: seems they have withdrawn their STB ISA today, so their best rate is now even worse, 1.6%).

The other accounts have AERs between 3% and 6% AER. From next April, you'll be able to earn £1,000 interest tax free, outside an ISA. So you earn way more money than in those normal ISAs, regardless of whether you save £1,000 or £1,500 a month.

If you expect to get a better mortgage from Nationwide (or Natwest, Aldermore) if you have an ISA with them, you could take it out 6 or so months before you need your mortgage. No need to commit years in advance, as nobody can predict what mortgage deals will be available in the future.

As to the HTB ISA: the Halifax one is the way to go, simply because it pays twice as much interest as most others.

tain

I guess my situation might be different to others, as I expect to be applying for a mortgage before the year is out so transferring my ISA to someone more favourable or mixing up rates offered isn't an option - I need to maximise my efforts immediately with whatever I decide to go with come this Saturday.


My main concern is that we manage to save even more than £1500 a month. There's a massive difference between the most I can put in a regular savings account, the most I can put in an ISA, and how pitiful the interest rates are if you've already maxed out savings + capped your ISA using HTB.


I wouldn't want £10-20k sitting there earning pittance because we chose 4% interest on £7200, rather than 1.6% on up to £30k.

Archi_Bald

tain wrote: »

I wouldn't want £10-20k sitting there earning pittance because we chose 4% interest on £7200, rather than 1.6% on up to £30k.

You can easily earn an average of 4%+ on that sum of money. If there are two of you, it's even easier.

As of today, there's also a new Nationwide FlexClusive Saver that takes £500 a month and pays 4% AER. You need to have something like the Nationwide FlexDirect (5% on up to £2,500 in year 1), and you can also make a couple of hundred by switching to that account.

There are literally hundreds of pounds difference to a dreadful 1.6% ISA.

I agree that the Halifax HTB ISA is the best option as the only differentiator these HTB ISAs have is their interest rate.

eddddd

colsten wrote: »

The other accounts have AERs between 3% and 6% AER. From next April, you'll be able to earn £1,000 interest tax free, outside an ISA. So you earn way more money than in those normal ISAs, regardless of whether you save £1,000 or £1,500 a month.

I'm also slightly perplexed by which NTB ISA to go for.


Please could you state some of the accounts which offer 3-6% AER.


I have been paying into an ISA since April this year, does this mean I am unable to open a HTB until April next year?

tain

Archi_Bald wrote: »

You can easily earn an average of 4%+ on that sum of money. If there are two of you, it's even easier.

As of today, there's also a new Nationwide FlexClusive Saver that takes £500 a month and pays 4% AER. You need to have something like the Nationwide FlexDirect (5% on up to £2,500 in year 1), and you can also make a couple of hundred by switching to that account.

There are literally hundreds of pounds difference to a dreadful 1.6% ISA.

I agree that the Halifax HTB ISA is the best option as the only differentiator these HTB ISAs have is their interest rate.

That makes things interesting. I also get a bonus for leaving First Direct within a year I think... So could be a double whammy. Cheers. Makes that decision easier.