Preserve accumulated ISA when buying a house

Jombob2001

My wife and I are currently renting and have just over £1m in capital that we we would like to use to buy a home next year. About £400k of that is in ISAs that we have built up over the years. We need to use all our money for the home purchase (London!) but I would like to preserve the accumulated ISA wrapper. I’ve looked at offset mortgages but th rates seem high - keen for any other ideas or thoughts from anyone.

silvercar

I'm a bit confused here. You need all the money in the ISA, but you want to preserve the ISA wrapper. How can you do both at the same time? 

The current rules allow you to replace money you have taken out within the same tax year. So if you have put the max 20k each in ISAs this financial year, you could in theory replace that before the end of the tax year. But other than that, once it is withdrawn and spent it has lost its wrapper.

MWT

silvercar said:

The current rules allow you to replace money you have taken out within the same tax year. So if you have put the max 20k each in ISAs this financial year, you could in theory replace that before the end of the tax year. But other than that, once it is withdrawn and spent it has lost its wrapper.

 As long as they have a 'Flexible' ISA, as not all ISA's have that feature, then they can remove a large lump-sum at the start of the tax year and put that in an offset account, and as long as they remove it from there and return it to the ISA before the end of the year then the wrapper is maintained. Repeat as needed. It isn't limited to the amount contributed in the year.

Some lenders will let you link a cash ISA account directly to an offset mortgage, Barclays for example...

... but is does assume that the purchase can be completed without that cash being used as this will not otherwise work.