Help to Buy ISA guide

colsten

If you have not paid into your ISA this year, you can open the HTB ISA straight away. Go for the Halifax one as that pays the best interest.

Your old ISA can independently be transferred to a better provider. Just don't pay any more money into it. Although a much better idea would be to take your £20K and distribute it across decent interest paying accounts and Regular Savers. E.g.

• £2,500 into a Nationwide FlexDirect
• £2,000 into a TSB Plus
• £5000 into a Club Lloyds
• 2 x £3,000 into 2 Tesco current accounts
• drip-feed the rest into a FlexClusive Regular Saver, TSB Monthly Saver and Club Lloyds Monthly Saver. When ISA is empty, use the Tesco current accounts as the feeder accounts for these monthly savings accounts.

A bit of work to set it all up but it will pay you vastly better interest than a normal cash ISA.

Other options are available, but that's what I would do.

michaels

jimjames wrote: »

Your original post commented about banks not making an equivalent account available to all which is clearly not true. There are plenty of accounts that you can pay in £200 per month and get 4% or more that match the HTB rates.

I guess it depends what you personally call sensible. I consider I have a sensible amount that will cover 6 months expenses as cash which is all at 5%, probably around £15k. All my remaining money is in S&S ISAs but I'm not saving to buy a property and I don't consider it sensible to hold all savings as cash long term.

I don't use regular savers, all my savings are in accounts paying 5%.

Whereas I have 120k that is having the rate cut from 3% to 2.25% in Jan and am looking for the best place to rehouse it. I already have all the bank accounts you mention (except for Tesco as I am holding out for a £100 clubcard points new customer offer). I have only done about half the regular savers so I will have to do the others then it gets harder - I think I may have found somewhere I can put 75k at 2.5% but given the money comes from a mortgage stooze and costs 2.5% I would rather do better. I also need to think about credit searches before I open many more current accounts.

aoc_2

colsten wrote: »

If you have not paid into your ISA this year, you can open the HTB ISA straight away. Go for the Halifax one as that pays the best interest.

Your old ISA can independently be transferred to a better provider. Just don't pay any more money into it. Although a much better idea would be to take your £20K and distribute it across decent interest paying accounts and Regular Savers. E.g.

• £2,500 into a Nationwide FlexDirect
• £2,000 into a TSB Plus
• £5000 into a Club Lloyds
• 2 x £3,000 into 2 Tesco current accounts
• drip-feed the rest into a FlexClusive Regular Saver, TSB Monthly Saver and Club Lloyds Monthly Saver. When ISA is empty, use the Tesco current accounts as the feeder accounts for these monthly savings accounts.

A bit of work to set it all up but it will pay you vastly better interest than a normal cash ISA.

Other options are available, but that's what I would do.

Hi Colsten,

This seems like the right option for me, but I just had a quick question... Would opening 2 or more current accounts in quick succession have a negative effect on my credit score? And if so, with me looking for a mortgage in the next 12-24 months is it worth it?

Thanks

cityzen4

Could I open an ISA and help to buy ISA with Nationwide and use my ISA allowance. Then switch the help to buy ISA to Halifax to get the 4% leaving the other ISA in Nationwide. Then wait until next tax year transfer the help to buy back to Nationwide and repeat?

Lynda_Faulkner

Great guide, but can my son use the First Time Buyer ISA to buy a residential barge?

Archi_Bald

As long as he can get a mortgage for a barge - yes.

colsten

aoc wrote: »

Hi Colsten,

This seems like the right option for me, but I just had a quick question... Would opening 2 or more current accounts in quick succession have a negative effect on my credit score? And if so, with me looking for a mortgage in the next 12-24 months is it worth it?

The general wisdom from those who have multiple current accounts is that applying for them is unlikely to impact a mortgage application negatively. The searches will obviously register on your credit files but they will fall off most after 12 months - only Callcredit/Noddle keeps them for 24 months. Credit/mortgage providers will probably also give less weight to any searches that are older than 6 months.

You shouldn't ask for an overdraft on those accounts, and not clock up any defaults. But that should not pose a problem.

colsten

cityzen4 wrote: »

Could I open an ISA and help to buy ISA with Nationwide and use my ISA allowance. Then switch the help to buy ISA to Halifax to get the 4% leaving the other ISA in Nationwide. Then wait until next tax year transfer the help to buy back to Nationwide and repeat?

No, you can't transfer just part of your subscription in the current year.

Why do you want a normal cash ISA anyway if you can get better interest in current accounts?

MARTYM8`

aoc wrote: »

Hi Colsten,

This seems like the right option for me, but I just had a quick question... Would opening 2 or more current accounts in quick succession have a negative effect on my credit score? And if so, with me looking for a mortgage in the next 12-24 months is it worth it?

Thanks

If you were looking to buy in the next six months – yes it might be an issue – but not if you will be taking out a mortgage in a year or two.

Opening lots of current accounts could affect your score as the bank will do a credit search each time you open a new current account – but they normally ignore searches more than six months old. The searches will drop off your Equifax and Experian reports in a year anyway and your Noddle/Callcredit report in 2 years.

In any case if you use a broker and explain these are high interest current accounts – used for savings – it really shouldn’t make any difference.

KatieElsom21

With the 250,000 limit on properties outside of London, does this equate to 500,000 for a couple?

Thanks