Help to Buy ISA guide

masonic

Jemsnation said:

I've had my help to buy for a few year which I'm currently putting the 200 into. I'm not 100% sure if I'm buying yet so not wanting to transfer to a LISA but can I open a Stocks and Shares ISA and pay into that as well as my help to buy as long as I don't go over 20000? Basically wanted to know where I can save anything over the 200 I want to put aside each month. 

Yes you can, but it would be unwise to invest any money you may need for a house deposit in the short term. A savings account would be an appropriate place to save anything over the £200 you are thinking of using towards the house purchase.

Jemsnation

Would 2-3 years be classed as short term? Savings accounts have such poor rates tho especially if you're not starting with a lump sum. 

masonic

Jemsnation said:

Would 2-3 years be classed as short term? Savings accounts have such poor rates tho especially if you're not starting with a lump sum. 

Yes, 2-3 years is short term. Investing for 5-10 years is feasible using low risk investments, but these may not beat savings accounts over that timeframe and come with some risk that you'll get back less than you put in.

If you only have a small extra amount to save per month then there are regular savings accounts paying up to 2.75%. The top easy access account requires minimum deposits of £500 and pays 1.16%.

Jemsnation

Noted. I've read so many articles about the best places to save, I'm probably more confused than when I started. I opened a Wealthify account to give that a go but I guess I'll stick with super small amounts in there at first to get a feel for how it works and check out the regular savings accounts you mentioned. 

bourbon19

I'm wondering if anyone can help.
I have a HTB ISA with Nationwide - I've got around £2,000 in there but the interest rate has now gone down to 1% because of the current climate.
I also have a LISA and thinking is it worth transferring my HTB into my LISA or somewhere else to get more interest. Like could I open a stocks & shares ISA to replace my HTB but still have my LISA?
Thanks.

grumiofoundation

bourbon19 said:

I'm wondering if anyone can help.
I have a HTB ISA with Nationwide - I've got around £2,000 in there but the interest rate has now gone down to 1% because of the current climate.
I also have a LISA and thinking is it worth transferring my HTB into my LISA or somewhere else to get more interest. Like could I open a stocks & shares ISA to replace my HTB but still have my LISA?
Thanks.

Transferring from HTB to LISA makes sense if you will use the LISA for house purchase. Drawback is lifetime ISA withdrawal penalty (currently lower than normal).

The actual interest rate is less important - the government bonus far outstrips the highest interest you could get elsewhere and beats the returns you could get on stocks and shares over a shortish timescale (~5 years) with no risk to capital.

Transferring the HTB to a stocks and shares ISA only makes sense if you want to invest in stocks and shares (i. e. risk your capital) - generally not seen as wise for money earmarked for a house deposit. 

SamH93

Hi, i'm wondering if anyone could help. 
I have just had an offer accepted on a house with my partner, my partner already owns another house which is on buy to let and currently rented out. This will be my first house but we are getting a joint mortgage together, will I be able to use my help to buy ISA as part of my deposit?  Thanks. 

eskbanker

SamH93 said:

Hi, i'm wondering if anyone could help. 
I have just had an offer accepted on a house with my partner, my partner already owns another house which is on buy to let and currently rented out. This will be my first house but we are getting a joint mortgage together, will I be able to use my help to buy ISA as part of my deposit?  Thanks. 

Yes, you can, provided of course that the purchase complies with the scheme rules on property value, etc.

Beki88

Just wanted to clarify something as I'm not sure. My partner sucks with money however I persuaded him to start saving. He has an instant cash ISA that was opened a couple of years ago. He moved the money saved into his normal account in November leaving £1 in the ISA as he was planning on buying a new TV. I managed to get him to open the save to buy ISA before the deadline last year, he used the £1 left in the other ISA to do so.
He has not added any money to either since that was opened however a few pence interest was added to the instant access account. 
It shows as he can still add £20k to the instant access one. But doesn't say anything on the HTB ISA. We assumed the instant one would be closed when he transferred the remaining £1.
So, hopefully that makes sense. I'm trying to get him saving again but don't know which one we (technically he) should be saving in? Or if we should open a fresh one that has better rates? 
He is unsure whether he will buy a house between now and 2030 because I already own the place we live in but I said it would be wise to just open the HTB just in case. I'm not stupid when it comes to finances but ISA's do confuse me a little and the last thing I want to do is give him the wrong advice. 
Oh he also hasn't opened any other ISA nor paid in to any this financial year. Just the automatic few P I mentioned earlier. 
Thanks in advance. 

eskbanker

If he hasn't paid into any ISA this tax year then he's free to fund either of his existing ones or open a new one - the HTB is a better bet in the sense that it offers the 25% bonus for first time property buyers but only if they buy before 2030, so if that's in doubt then there's less of an advantage, although chances are the rate will be better than non-HTB cash ISAs.  It's limited to £200/month contributions though.

Another option would be a Lifetime ISA, which also offers 25% bonus to first time buyers - it has a higher contribution limit (£4K/year) and allows purchase of properties up to £450K, but also has penalties for withdrawals for other reasons, which sounds like it may be an issue?