Lifetime ISA and Mortgage

Lisahousebuy

Hi all

My son has a lifetime ISA, he is in the process of buying his first home in his name, we were going to gift him the rest of outstanding amount. 
However we have been told he needs a mortgage in order to use his lifetime ISA and get the bonus, otherwise cashing in he loses 25% getting less than what he has put in. 

Question - does the mortgage have to be the outstanding amount or can I get a small mortgage with no ERC and so he can use his Lifetime ISA, and then possibly pay the mortgage straight off? Also any time limit before paying it off? 

Thanks all

se2020

The mortgage needs to be in the name of the LISA holder. You can't get the mortgage for him.

The Lisa withdrawal penalty actually only costs him 6.25% of the amount withdrawn so make sure it's actually cheaper to get a mortgage than just pay the penalty. 
A mortgage with no ERC will still cost you in the stuff the bank will require like survey,  valuation, product fees and the extra solicitors costs for working with a lender.