Help to buy ISA restrictions

mb23647

I’m in the process of buying my first home and was hoping my help to buy ISA bonus would help cover fees or deposit. However I realised the house I’m buying is over the £250k limit outside of London and I think it’s too late to transfer my funds into a Lifetime ISA. I was meant to sort that out last year but life got in the way! Does anyone have any advice on what I should do. Is it best to transfer the savings I have in my H2B ISA into a savings account with better interest since I won’t get the bonus. Is it definitely too late for me to transfer into a LISA since I’ll be moving in the next 4ish months? Very frustrated that I won’t be getting the bonus since I opened my Help to buy ISA years and years ago, but at least I’ll finally have a house of my own soon.

masonic

Unless you already have a LISA open, then you won't be able to meet the condition to hold it for a year before making your penalty free withdrawal.

If you definitely won't meet the £250k house price limit, then there is nothing to gain from keeping the money there. So it would make sense to focus on interest over the next few months.

PRAISETHESUN

If you're certain you won't be able to use it for your house purchase then there's no reason to keep the money in a H2B ISA. You can transfer it to another cash ISA with a better interest rate to keep it in the ISA wrapper, or just withdraw it if you intend to spend it on your house purchase and don't need to keep it in the ISA wrapper.

Transferring to a LISA would only be beneficial if you're able to take advantage of it, which requires an account open for 12+ months. There's no wiggle room around that. And if you deposit/transfer into a LISA but don't/can't use it for a house purchase then you'll need to pay the withdrawal penalty if you want to access it again before retirement.