Help to Buy ISA

slenderkitten

Hi,

I'm just thinking out loud here, I have about £6k in a Help to Buy ISA yes I'm aware the scheme is closed. 

The interest rate isn't much, I am hoping to buy a house in the near future I don't know how it this isa works anyway other than getting a top-up from the government.  I'm just wondering if it's worth keeping my money in this account given the dreadful interest rate from Halifax and how is this account used in a purchase as i heard that it isn't used in the way it was designed.  Or should I give up on this account and go for a regular savings account and just save more money but get a better return back?

I'm too old for a L-ISA account.

Thanks for your input.

eskbanker

slenderkitten said:

how is this account used in a purchase as i heard that it isn't used in the way it was designed.

What are you referring to here?  I'm not aware of any changes to the scheme, which in itself may be an issue as the property value cap of £250K (£450K in London) is less generous as each year passes.

Assuming your purchase will qualify, the fact that the government adds a 25% bonus is highly likely to outweigh the potential interest benefit of another account with a better interest rate....

slenderkitten

I get almost double interest rate in my non-isa and I can put in whatever amount I want, that's why I'm questioning what to do.

I got £100 interest in the ISA last year 

eskbanker

slenderkitten said:

I get almost double interest rate in my non-isa and I can put in whatever amount I want, that's why I'm questioning what to do.

I got £100 interest in the ISA last year 

But the point is that, even ignoring the interest, the £6K in your HTB ISA will be bumped up to £7.5K by the government when you buy (assuming you're within the scheme's property value cap, as above) - where else will you be able to turn that £6K into £7.5K, and how long would it take to do that?

You can obviously put the rest of your savings in unlimited accounts, but it seems highly unlikely that it would be worth moving the £6K out of the HTB if you'll be making a qualifying purchase "in the near future".