Saving Advice for first house needed

deadly_duncan

Hello,
I'm currently saving the maximum £200 each in to a Help To Buy ISA. The rate is 2.5% and have £3000 in there. Im also paying in to a normal cash ISA which is giving me 0.20% (Rubbish, I know)

Im thinking of swapping to a lifetime ISA. (I've have one open but only £1 in there) The Rate is 1.4%

Best way to max out my savings?

Im going to need to transfer it to a Lifetime ISA in the end as the house might be over £250,000, even if its not over that ill still get 25%. So im thinking the money is better in the Lifetime ISA but don't want to lose out on the 2.5% rate. Hope that makes sense. Should i keep putting £200 then transfer at the end of each year or when im ready to buy?

I'm thinking, keep saving in to my Help To Buy till Mar (to get the 2.5% rate) then transfer it to the Lifetime ISA. So i can get the Government 25%. Good idea?

What should i do with my other rubbish ISA. Where should i put that money. There is £1,000 in there.

Any advice? Im looking to buy a house Late 2020 or even in 2021.

Thank you

SamJ35

Bear in mind the LISA has to be open for 12 months before you can claim the 25%. So to buy in late 2020 you want to open it as soon as possible. You can put in up to £4000 before April 2020, and £4000 after (I believe bonus is paid monthly). Then buy after 12 months of account opening.

Have you thought about keeping the H2B ISA open and continuing to add 200 per month to take advantage of the 2.5% interest, in addition to having the LISA.

You could transfer your £1000 cash ISA balance to the LISA, then save as hard as you can to get as much as possible into the LISA up to £4000 per tax year. Then you claim the 25% bonus on the LISA for the property purchase, and treat the H2B ISA as a normal cash ISA because of the preferential interest. Lots of people doing that I believe.

deadly_duncan

Thank you, SamJ35. My LISA is already open so not worried about that.

Very good idea for using H2B as a normal ISA. What i could do then is when i'm ready to buy transfer some of that in to my LISA (up to the £4000) then just use the rest as normally and don't claim the government bonus on the H2B.

Thank you that makes sense.

Alexland

deadly_duncan wrote: »

Very good idea for using H2B as a normal ISA. What i could do then is when i'm ready to buy transfer some of that in to my LISA (up to the £4000) then just use the rest as normally and don't claim the government bonus on the H2B.

Remember you can add up to £4k per tax year so if you are going to use the LISA to support the property purchase then you probably want to try and get the full £4k in by 5th April 2020 and then a further full £4k in from 6th April 2020 allowing enough time for the bonus to be added before the solicitor draws the money.


Alex

bhjm

SamJ35 wrote: »

Bear in mind the LISA has to be open for 12 months before you can claim the 25%. So to buy in late 2020 you want to open it as soon as possible. You can put in up to £4000 before April 2020, and £4000 after (I believe bonus is paid monthly). Then buy after 12 months of account opening.

Bonus is paid the month after you paid in.Correct is, you need to have the account opened for 12months before you can use the money towards your first home.