Help to Buy ISA guide

em_dye

Hi

HELP! I'm a bit confused with how the help to buy Isa works alongside an existing cash Isa.

I have a Cash Isa that I've been paying into this tax year and just going to transfer it into a better rate one before April 16.

My question is, I plan to open a HTB Isa in April and hopefully pay into it until I reach £12000. But I'm unsure if I will be in a position to buy a house in 4 and half years. Would I then be able to pay into my original cash ISA after i've got 12000 in htb one? Can I keep my original cash isa open as long as i'm not paying into it over the 4 and half years.

Or would I be better to open a split isa/htb isa?

Any advice welcome!!!:rotfl::rotfl:

Archi_Bald

You cannot pay into an HTB ISA and into another cash ISA in the same tax year. The good news is, there are many accounts that pay better interest than cash ISAs.

MARTYM8`

Archi_Bald wrote: »

You cannot pay into an HTB ISA and into another cash ISA in the same tax year. The good news is, there are many accounts that pay better interest than cash ISAs.

You can - if its with a split ISA provider like Nationwide or RBS/Natwest.

Whether as you say you would want to given the better rates on offer in current accounts/regular savers - particularly given the new £1k savings interest tax free limit from April for basic rate taxpayers - is another matter!

Gumisa

Hi, I have a Help to Buy ISA and am due to exchange contracts next month but completion of the house won't be until next year...when would I have to close my ISA to receive the government incentive? At point of exchange of contracts or when the morgage is in place next year? Thanks in advance.

Luchag

Brilliant guide. Many thanks.
You say that a Help to Buy ISA has to be used in conjunction with a residential mortgage. Our son has some savings which he would like to transfer into a Help to Buy ISA, on a monthly basis. He'd like to buy a house in 18 months time, but is likely to have problems getting a mortgage as he is a student with very little income. We are fortunate to have enough cash to lend him. If we get a lawyer to draw up a legal contract between us for a "family mortgage", with our son agreeing to pay back the capital and a bit of interest - would this count as a "residential mortgage"? ie Would his lawyer be able to claim the 25% free cash for the deposit?

Rich2808

Luchag wrote: »

Brilliant guide. Many thanks.
You say that a Help to Buy ISA has to be used in conjunction with a residential mortgage. Our son has some savings which he would like to transfer into a Help to Buy ISA, on a monthly basis. He'd like to buy a house in 18 months time, but is likely to have problems getting a mortgage as he is a student with very little income. We are fortunate to have enough cash to lend him. If we get a lawyer to draw up a legal contract between us for a "family mortgage", with our son agreeing to pay back the capital and a bit of interest - would this count as a "residential mortgage"? ie Would his lawyer be able to claim the 25% free cash for the deposit?

No - sorry It has to be a proper mortgage with a bank of building society. So he will need a small mortgage - which can of course be paid off straightaway.

The Government hasn't just introduced this scheme to help first time buyers - otherwise cash buyers would be eligible for it. Bankers need to eat too - they will get nice profitable customers for 25 years.

colsten

There are several schemes for first time buyers: https://www.helptobuy.gov.uk/

Luchag

Rich2808 wrote: »

No - sorry It has to be a proper mortgage with a bank of building society. So he will need a small mortgage - which can of course be paid off straightaway.

The Government hasn't just introduced this scheme to help first time buyers - otherwise cash buyers would be eligible for it. Bankers need to eat too - they will get nice profitable customers for 25 years.

Thanks very much Rich and also many thanks to Colsten. Very helpful replies. :T

sl_jones

Hi all,

I have a quick questions which wasn't answered really in the guide, I have also looked on the Halifax website and can't seem to find an answer.

My mum doesn't pay a mortgage and owns her own property, I have maxed out my ISA limit for the year and have both a stocks and shares and cash ISA.

Could she own a help to ISA in her name and then i just pay into it? But i don't know if when you apply to a property it will have to be in her name, as will the mortgage?

jimjames

sl_jones wrote: »

Could she own a help to ISA in her name and then i just pay into it? But i don't know if when you apply to a property it will have to be in her name, as will the mortgage?

Have you read the conditions of the HTB ISA? If your mum owns a property already do you think she is a first time buyer?


You may also not be aware that you can do far better than ordinary cash ISAs so could get a much better rate on your existing ISA alongside a HTB one.