Help to Buy ISA guide

dwoods1723

Hi, I am looking to transfer my HTB into a LISA but the advice everywhere says you can only transfer £4K per tax year- is that true? I have £12k in HTB and look to save the max amount for another 2 years so would get a lot more of a benefit from a LISA if I can get a higher bonus

masonic

dwoods1723 said:

Hi, I am looking to transfer my HTB into a LISA but the advice everywhere says you can only transfer £4K per tax year- is that true? I have £12k in HTB and look to save the max amount for another 2 years so would get a lot more of a benefit from a LISA if I can get a higher bonus

That is correct, there is a maximum limit of £4k into a LISA per tax year including any sum transferred from another type of ISA. There was the option to transfer your HTB ISA in full to a LISA without it affecting the £4k limit in the tax year LISAs were first introduced (2017/18) to allow people to switch from HTB ISA to LISA, but it is far to late to avail yourself of that now.

dwoods1723

Thanks for that. As an added question would I be able to buy a house with my girlfriend if she has a LISA and I have HTB? 

masonic

dwoods1723 said:

Thanks for that. As an added question would I be able to buy a house with my girlfriend if she has a LISA and I have HTB? 

Yes, you can each use a different product, but the purchase will need to meet the requirements of both schemes.

Alexland

Yes provided the purchase is within the rules of both schemes eg holding the LISA for a year, the lower HTB property cap outside london, etc.

fdsa987

masonic said:

fdsa987 said:

Hi, I have a help to buy ISA with nationwide (1% interest) and was wondering whether it's worth it to switch to HSBC (1.7% interest).

However, before the rates were cut (in 2019), nationwide had a higher rate (at 2.5%) compared to HSBC (2.25%). So I'm wondering whether it's worth waiting until rates go back up again as I'm assuming nationwide will have a higher rate then.

Also, once switched to HSBC, I won't be able to switch back to nationwide.

What is the balance of the HTB ISA (some HTB ISAs have tiered interest rates, so you should watch out for this), and how long do you think it will be before you buy?

I wouldn't assume HTB ISA rates will ever go back up.

Around £1000 in the HTB ISA currently, but will put more money in in the next couple years (as I'm currently a student) - which is why the interest rate right now isn't as important as it would be in the future.
Also, the HTB ISA will be automatically closed after 2029 (same for all HTB ISAs), which is probably when I will be buying a 1st property.
I could change it to HSBC, or wait a year to see what happens to the interest rates at Nationwide (which as u said might not go up again)

#Many thanks

masonic

fdsa987 said:

masonic said:

fdsa987 said:

Hi, I have a help to buy ISA with nationwide (1% interest) and was wondering whether it's worth it to switch to HSBC (1.7% interest).

However, before the rates were cut (in 2019), nationwide had a higher rate (at 2.5%) compared to HSBC (2.25%). So I'm wondering whether it's worth waiting until rates go back up again as I'm assuming nationwide will have a higher rate then.

Also, once switched to HSBC, I won't be able to switch back to nationwide.

What is the balance of the HTB ISA (some HTB ISAs have tiered interest rates, so you should watch out for this), and how long do you think it will be before you buy?

I wouldn't assume HTB ISA rates will ever go back up.

Around £1000 in the HTB ISA currently, but will put more money in in the next couple years (as I'm currently a student) - which is why the interest rate right now isn't as important as it would be in the future.
Also, the HTB ISA will be automatically closed after 2029 (same for all HTB ISAs), which is probably when I will be buying a 1st property.
I could change it to HSBC, or wait a year to see what happens to the interest rates at Nationwide (which as u said might not go up again)

I would be inclined to transfer to HSBC. You can't know the future, so go for the best rate available today. As you'll be holding the account for some time to come it will pay to chase the best rate. I think it is very unlikely to see the tables turn again, but if Nationwide were to double its rate you could always switch back.

fdsa987

masonic said:

fdsa987 said:

masonic said:

fdsa987 said:

Hi, I have a help to buy ISA with nationwide (1% interest) and was wondering whether it's worth it to switch to HSBC (1.7% interest).

However, before the rates were cut (in 2019), nationwide had a higher rate (at 2.5%) compared to HSBC (2.25%). So I'm wondering whether it's worth waiting until rates go back up again as I'm assuming nationwide will have a higher rate then.

Also, once switched to HSBC, I won't be able to switch back to nationwide.

What is the balance of the HTB ISA (some HTB ISAs have tiered interest rates, so you should watch out for this), and how long do you think it will be before you buy?

I wouldn't assume HTB ISA rates will ever go back up.

Around £1000 in the HTB ISA currently, but will put more money in in the next couple years (as I'm currently a student) - which is why the interest rate right now isn't as important as it would be in the future.
Also, the HTB ISA will be automatically closed after 2029 (same for all HTB ISAs), which is probably when I will be buying a 1st property.
I could change it to HSBC, or wait a year to see what happens to the interest rates at Nationwide (which as u said might not go up again)

I would be inclined to transfer to HSBC. You can't know the future, so go for the best rate available today. As you'll be holding the account for some time to come it will pay to chase the best rate. I think it is very unlikely to see the tables turn again, but if Nationwide were to double its rate you could always switch back.

Yeah I will probably go with HSBC then, but the issue is Nationwide doesn't allow you to transfer ur HTB ISA to them from a different bank (only HSBC and Halifax allow this). So once its switched, I won't be able to go back

RobynWharton95

Hello, I do not currently own my own home however I am looking to buy a property with my boyfriend who does own his own home. Can I still use my HTB ISA and get the 25% from the government as the property will be my first home, however it would not be my boyfriends?

masonic

RobynWharton95 said:

Hello, I do not currently own my own home however I am looking to buy a property with my boyfriend who does own his own home. Can I still use my HTB ISA and get the 25% from the government as the property will be my first home, however it would not be my boyfriends?

Yes you can, it is only the HTB ISA holder that needs to be a first time buyer when a property is purchased jointly.