Help to Buy ISAs

Chattygirl

Can someone give me advice on an help to buy ISA. I believe the most you can open one with is £1200 and max £200 per month. If I have £4,000 to save towards a deposit for a house, and want to save £200 per month. What is the best way to maximise my money prior to buying a house, hopefully next year. Should I put £3000 in a high interest account and then move it all into a Lifetime ISA closer to the time? All suggestions welcome

Rich2808

Unless you want to buy a house in the next few months - or are over 40 - a lifetime isa is a better bet particularly outside London where the property limit is £450k (vs £250k for the HTB isa).

You can invest your full £4000 straight away and qualify for a £1k bonus at the end of the tax year - and then use it for a purchase in the next tax year. If you opened a help to buy isa you could only invest £3,000 by 5 April 2019 - which would only accrue a £750 bonus.

Of course you could also keep the £4k in a high interest current account until March as you suggest - and then pay it into your lifetime isa as a lump sum.

If you go for the cash version a lifetime isa will pay less interest - but not £250 less interest!

frankmassiebonsai

Although, its worth opening the LISA with £1 now to get the one year clock started. Just remember to only pay in up to £3999 later in the year.