Help to Buy ISA guide

tyranix

Hi all,

Sorry if this has been asked (it probably has) but I couldn't find it after browsing through several pages of this very long thread:

My wife and I are hoping to buy our first house; a new build. We both have Help to Buy ISAs open with approximately £8000 saved between them. The 5% deposit we'd need for the house is £12,250. We have just about enough additional money in our current accounts to pay this, but only along with the £8000 from the HTB ISAs.

I'm seeing lots of stuff online about not being able to use the GOVERNMENT BONUS part of the HTB ISA for the deposit. Unfortunate, but I understand why. However, something that I can't find clarified is whether we can use that £8000 in our ISAs to go towards the deposit, and then still get the £2000 Government Bonus on those savings LATER ON at the completion stage?

Just trying to figure out whether we'd either:
a) Have to take out that £8000 and use it for the deposit, but because we took it out of our HTB ISAs we'll NEVER get the Government bonus
b) Just leave that money in there and keep saving normally for another year or so, so that we can pay a deposit from our current accounts and not use the HTB ISAs for the deposit
c) Can go forward and buy, using the combined £8000 and additional £4250 from our current accounts for the deposit. Then once the contracts are exchanged, the Government bonus will come later, accrued on that £8000 (so 25% of that would be £2000 bonus).

If anyone could help I'd be very grateful. Thank you either way!

masonic

tyranix wrote: »

Just trying to figure out whether we'd either:
a) Have to take out that £8000 and use it for the deposit, but because we took it out of our HTB ISAs we'll NEVER get the Government bonus
b) Just leave that money in there and keep saving normally for another year or so, so that we can pay a deposit from our current accounts and not use the HTB ISAs for the deposit
c) Can go forward and buy, using the combined £8000 and additional £4250 from our current accounts for the deposit. Then once the contracts are exchanged, the Government bonus will come later, accrued on that £8000 (so 25% of that would be £2000 bonus).

If anyone could help I'd be very grateful. Thank you either way!

The HTB ISA bonus can only be used at completion towards the mortgage deposit, so if you need to pay a deposit at exchange those funds would need to come from the balance of your HTB ISA and any other savings you have. The closure statement for your HTB ISA is valid for 12 months, which should give ample time for the bonus to be claimed after exchange. During this time your solicitor would apply for the Government bonus and this will be put towards the purchase at completion.

jlrobinson96

I aim to open one for my younger sister who is 16. I have £1450 of her savings in her name but I am a parent/guardian. She does not work and is going to college in September. Should I open her an account and deposit the £1200 into it but I am conscious that there probably won't be any deposits until she is working? Does this matter? thanks

eskbanker

jlrobinson96 wrote: »

I aim to open one for my younger sister who is 16. I have £1450 of her savings in her name but I am a parent/guardian. She does not work and is going to college in September. Should I open her an account and deposit the £1200 into it but I am conscious that there probably won't be any deposits until she is working? Does this matter? thanks

She'd need to open the account herself, i.e. not you on her behalf, but once open there's no minimum monthly funding, just a maximum.

Jenlawrence

Hi there

I'm a bit confused about the Cash ISA and how it affects the Help to Buy ISA.
If I've only paid out of a cash ISA since 5 April this year so will I be able to get a Help to Buy without splitting it?

eskbanker

Jenlawrence wrote: »

I'm a bit confused about the Cash ISA and how it affects the Help to Buy ISA.
If I've only paid out of a cash ISA since 5 April this year so will I be able to get a Help to Buy without splitting it?

Paying out of ISAs doesn't affect anything?

If you mean you've paid into a cash ISA since 5/6 April then yes, you can't also pay into a Help To Buy ISA until next April unless both are with one of the providers offering split ISA capabilities. HTB ISAs are cash ISAs so it's not generally possible to fund both concurrently....

Cloweka

Need some advice, think ive been a bit silly, have been using a hsbc cash isa for years as a means of just putting money aside short term, taking in and out. I then opened a help to buy isa with Halifax (i haven't put anything in yet but want to start saving for a house) but have seen that if you have even put money into any cash isa since April you cannot use your h2b isa in the same tax year? Is this correct? Can I switch? I would have just waited till next April but h2b stops from November 😟 am I f****d?

eskbanker

Cloweka wrote: »

Need some advice, think ive been a bit silly, have been using a hsbc cash isa for years as a means of just putting money aside short term, taking in and out. I then opened a help to buy isa with Halifax (i haven't put anything in yet but want to start saving for a house) but have seen that if you have even put money into any cash isa since April you cannot use your h2b isa in the same tax year? Is this correct? Can I switch? I would have just waited till next April but h2b stops from November 😟 am I f****d?

https://www.moneysavingexpert.com/savings/help-to-buy-ISA/#tip8 outlines your options, which could include transferring your HSBC cash ISA into Halifax's HTB ISA (if below £1200), or transferring your HSBC one to another provider who offers split ISAs, including HTB ISAs, and then closing your Halifax HTB (technically not open if unfunded) and opening one with the new provider.

Or consider a Lifetime ISA instead perhaps?

RealElement47

Can you get double the amount for a couple? So you can save twin e the amount?

eskbanker

RealElement47 wrote: »

Can you get double the amount for a couple? So you can save twin e the amount?

Yes, if both are first-time buyers, as explained in the article that this thread is all about.