Can you use a LISA and H2B ISA to buy a house?

Wildsound

masonic wrote: »

I can generalise it for you: prioritise filling deposit accounts paying the highest net interest rate.

I agree.What I find is a lot of people get confused thinking you can only have either a LISA or a HTB, due to the fact you can only use one of the bonuses, and so completely miss the fact you can have both open at the same time given there is technically no penalty to close the HTB ISA if you intend to use the LISA for the house purchase. The initial opening of the LISA and the fact people could transfer their HTB ISAs into it with added bonus (for 1 year only) only added to the confusion.

Hopefully these products will come to an end soon or be simplified so I don't have to keep explaining them to increasingly confused consumers.

masonic

Wildsound wrote: »

I agree.What I find is a lot of people get confused thinking you can only have either a LISA or a HTB, due to the fact you can only use one of the bonuses, and so completely miss the fact you can have both open at the same time given there is technically no penalty to close the HTB ISA if you intend to use the LISA for the house purchase. The initial opening of the LISA and the fact people could transfer their HTB ISAs into it with added bonus (for 1 year only) only added to the confusion.

Yes, and you could take advantage of that one-time transfer of your HTB ISA into a LISA as an additional subscription and then open another HTB ISA.

Hopefully these products will come to an end soon or be simplified so I don't have to keep explaining them to increasingly confused consumers.

There's a 30th November 2019 cut off for new accounts, so not much longer. Those who at that time hold one have another 10 years before they close to new subscriptions, but those people should be fairly clued up.

Oasis1

Where can I find more information about the 30 Nov 2019 cut off date? Do we know what this will mean for H2B ISA holders?

eskbanker

Oasis1 wrote: »

Where can I find more information about the 30 Nov 2019 cut off date? Do we know what this will mean for H2B ISA holders?

See the official FAQ at https://www.helptobuy.gov.uk/help-to-buy-isa/faq/#809a24ea-e1f7-648f-8ce9-ff0000ad17aa:

How long will Help to Buy: ISAs be available for?

You’ll be able to open a Help to Buy: ISA until 30 November 2019. After that date they won’t be available to new savers anymore – but if you opened your Help to Buy: ISA before then you can keep saving into your account until 30 November 2029 when accounts will close to additional contributions.

You must claim your bonus by 1 December 2030.

Oasis1

Thanks Esk.


I wonder what will happen to H2B ISA interest rates over that 10 year period, seeing as banks won't be competing for customers to open them any more...

masonic

Oasis1 wrote: »

I wonder what will happen to H2B ISA interest rates over that 10 year period, seeing as banks won't be competing for customers to open them any more...

It would still be possible for customers to transfer them to others who offer them. Presumably these are attracting a premium rate because there is the potential of a mortgage application at the end. That won't change.

Alexland

Oasis1 wrote: »

I wonder what will happen to H2B ISA interest rates over that 10 year period, seeing as banks won't be competing for customers to open them any more...

My guess is the HTB ISA rates will tail off a bit as providers focus their investment in new products and HTB customer and switcher volumes decline.

Alex

Oasis1

Well here's hoping switching competition means the interest rate clings on for a good few years before it tails off.

I miss Halifax's 3%...

aj23_2

You can use the money from both, yes. But only the bonus from one.

aj23_2

Oasis1 wrote: »

And here's the first scenario spreadsheet for reference

Are you implying that you'd get £307 from Barclay's at 2.58% on a £3,400 yearly deposit? (You've written £2,400, which is wrong for the first year). Because you wouldn't.