One payment of £12,000 for full bonus. Is it possible?

Vanillamax

Hi, I have just come across the Help to Buy ISA's, so I am just getting my head around it.
My son has been left a lump sum and wants to buy his own place very soon. Would he be able to put £12,000 into the ISA in one go to enable him to get the full £3,000 bonus?

fireblade28

Vanillamax wrote: »

Hi, I have just come across the Help to Buy ISA's, so I am just getting my head around it.
My son has been left a lump sum and wants to buy his own place very soon. Would he be able to put £12,000 into the ISA in one go to enable him to get the full £3,000 bonus?

No apparently.

I asked about this when I was offered one at the bank. Lady told me I couldn't. It has to be done in installments.

The other problem I had with these accounts is what house can you buy for £15000 as a deposit?

Rich2808

Its restricted to £1200 in month 1 and then £200 each month thereafter. A first time buyer couple can of course have one each.

So it will take you at around 5 years to reach £12k and get the full bonus. However it may be useless by then if house prices mean you exceed the £250k limit in your area.

Still worth doing - and you can transfer it to the more generous lifetime isa which becomes available from April. That has a £450k property purchase limit everywhere rather than £250k (450k in London).

jimjames

fireblade28 wrote: »

No apparently.

I asked about this when I was offered one at the bank. Lady told me I couldn't. It has to be done in installments.

The other problem I had with these accounts is what house can you buy for £15000 as a deposit?

You don't need to only have the ISA money for the deposit. The maximum purchase price is £250k or £450k depending on location

fireblade28

jimjames wrote: »

You don't need to only have the ISA money for the deposit. The maximum purchase price is £250k or £450k depending on location

Right of course there are other things but it's the main chunk and £15k maybe even 30k isn't gonna cut it in lots of areas. I will probably need around 50k

TheBanker

fireblade28 wrote: »

Right of course there are other things but it's the main chunk and £15k maybe even 30k isn't gonna cut it in lots of areas. I will probably need around 50k

Yes but the point is, you save the £200 in the HTB ISA and the other £xx in a different account. Then you benefit from the 25% bonus on the £200 so when you come to buy you are still being helped with a deposit.

The government I guess cannot afford to subsidise house deposits by more than 25% of £200 per month.

I am in the same position but look at it like this:
I started the HTB ISA in December, and have paid the maximum contributions so I now have £3,000. If I buy a house I will net a bonus of £750
I have approx £20k in other savings which will also form part of my deposit.

If I did not have the HTB ISA I would have £23k in other savings but would not get the £750.

In the grand scheme of a house purchase £750 is not a lot but it will pay for some of the furniture or other expenses associated with moving.

The other benefit is the Halifax interest rate of 4% (3.5% from December) that I am earning is actually quite good and to earn a similar rate elsewhere would be difficult as it would involve even more faffing about with current accounts.

As far as I can see the real issue is that if you live in the South East but not London, you will really struggle to find a property under £250k. I don't really want to leave Hertfordshire but here that £250k would perhaps buy a garden shed.

Chadsman

TheBanker wrote: »

The other benefit is the Halifax interest rate of 4% (3.5% from December)

Have you had a letter saying the rate is to be cut? I knew it would happen eventually, 3.5% is a lot better than it could have been.


edit: just seen other threads... disappointing but not surprising.

TheBanker

Chadsman wrote: »

Have you had a letter saying the rate is to be cut? I knew it would happen eventually, 3.5% is a lot better than it could have been.

Yes, I think it came about a week ago. Only surprise is that they've not reduced it by more.