Help to Buy ISA guide

Options
1…162163165167168…235

Comments

  • bobdilan
    bobdilan Posts: 4 Newbie
    Options
    Hi all,

    I have a HTB ISA which I've been paying into for a while now, around £5,800 added in. However, I was hoping to buy a property much sooner and would have gone for the LISA if I had known. My situation now is I'm likely to buy now around September 2019, but wondered if it might be better to open a LISA and wait 12 months (so Jan 2020) to buy somewhere.

    My question is, would I be able to use the contributed funds from both ISAs? I understand the bonus' would only be added from one ISA and after completion but is it still possible to use both to contribute towards the mortgage deposit? I could transfer over £4000 as a lump sum but would be missing out on the £1800 which I've put in?

    Thanks

    Bob
  • Alexland
    Alexland Posts: 9,668 Forumite
    First Anniversary Photogenic Name Dropper First Post
    Options
    There is nothing stopping you buying with the LISA (after 12 months to avoid the penalty) and just using the HTB ISA for the higher interest rate without claiming the bonus.

    Personally I wouldn't let whatever small differences in ISA bonus values determine when you are going to buy a property. It's the tail wagging the dog again.

    With the LISA the bonus is added around a month after each contribution and with a HTB ISA the bonus is claimed when you buy a property but cannot be used for the exchange deposit.

    Alex
  • masonic
    masonic Posts: 23,434 Forumite
    Photogenic Name Dropper First Post First Anniversary
    Options
    bobdilan wrote: »
    I have a HTB ISA which I've been paying into for a while now, around £5,800 added in. However, I was hoping to buy a property much sooner and would have gone for the LISA if I had known. My situation now is I'm likely to buy now around September 2019, but wondered if it might be better to open a LISA and wait 12 months (so Jan 2020) to buy somewhere.

    My question is, would I be able to use the contributed funds from both ISAs? I understand the bonus' would only be added from one ISA and after completion but is it still possible to use both to contribute towards the mortgage deposit? I could transfer over £4000 as a lump sum but would be missing out on the £1800 which I've put in?
    You can contribute funds to the purchase from any source. So if you made a penalty free withdrawal from your LISA in 12 months, then you could also add funds you were saving in the HTB ISA (but no bonus could be claimed of course).

    You could open a LISA with £1 to keep your options open. If you don't end up buying for a year then you can add £4000 either from the HTB ISA or elsewhere, and use all of the funds you have saved towards the purchase.
  • bobdilan
    bobdilan Posts: 4 Newbie
    Options
    Thanks Alex and masonic, both helpful responses.

    I think opening a LISA with £1, as a fallback is a great idea and also not letting the bonus' dictate on when to buy.

    I have another question on ISAs in general now (not really sure on where I should be asking this - please suggest a better/the correct place if there is one).

    I understand that paying into a Help to Buy ISA (at a maximum of £200 per month) means you cannot save any of the remaining portion of your total £15,240 ISA allowance into a Cash ISA in the same year. But am I able to open a Lifetime S&S ISA today with £1, as you can open one Cash ISA and one S&S ISA a tax year right? Or would I have to wait till April to do this?
  • eskbanker
    eskbanker Posts: 31,349 Forumite
    First Anniversary Name Dropper Photogenic First Post
    Options
    bobdilan wrote: »
    I understand that paying into a Help to Buy ISA (at a maximum of £200 per month) means you cannot save any of the remaining portion of your total £15,240 ISA allowance into a Cash ISA in the same year. But am I able to open a Lifetime S&S ISA today with £1, as you can open one Cash ISA and one S&S ISA a tax year right? Or would I have to wait till April to do this?
    As per https://www.gov.uk/individual-savings-accounts:
    There are 4 types of ISA:
    • cash ISAs
    • stocks and shares ISAs
    • innovative finance ISAs
    • Lifetime ISAs
    You can put money into one of each kind of ISA each tax year.
    so you can pay into a Lifetime ISA and a HTB ISA concurrently, even if the LISA is a cash one.

    You can actually pay into both a HTB ISA and another cash ISA concurrently if you choose to use the same provider for both and that provider is one of those allowing split ISAs (effectively lumping multiple cash ISAs together as one). These providers are listed at https://www.moneysavingexpert.com/savings/best-cash-isa/ under "Can I split between a fixed and easy-access ISA (or regular saver ISA)?"

    P.S. The annual ISA allowance is £20,000, since April 2017.
  • Ajacks
    Ajacks Posts: 2 Newbie
    Options
    Hi I have a help to buy isa which currently has around £7k in it. I’m looking to buy a home from Dec 2020 or after. Am I best to continue to save in my H2B isa or change to a lifetime isa? TIA for any advice
  • eskbanker
    eskbanker Posts: 31,349 Forumite
    First Anniversary Name Dropper Photogenic First Post
    Options
    Ajacks wrote: »
    Hi I have a help to buy isa which currently has around £7k in it. I’m looking to buy a home from Dec 2020 or after. Am I best to continue to save in my H2B isa or change to a lifetime isa? TIA for any advice
    LISA gives greater bonus potential (on £4K per tax year, versus £2,400 with HTB) if you have more money available, but HTB ISAs have better interest rates if you're only likely to be adding £200/month.

    That and other aspects are compared at https://www.moneysavingexpert.com/savings/lifetime-isas/#property-6
  • shabeka
    shabeka Posts: 1 Newbie
    Options
    Hi
    after reading up on the help to buy ISA i'm now a little confused as to weather i can apply for one.

    My aunt recently signed her house over into mine and my sisters name
    so technically i'm a home owner. But as i never bought the property am i still entitled to a help to buy ISA
    Could someone please help?

    thanks in advance
  • eskbanker
    eskbanker Posts: 31,349 Forumite
    First Anniversary Name Dropper Photogenic First Post
    Options
    shabeka wrote: »
    Hi
    after reading up on the help to buy ISA i'm now a little confused as to weather i can apply for one.

    My aunt recently signed her house over into mine and my sisters name
    so technically i'm a home owner. But as i never bought the property am i still entitled to a help to buy ISA
    Could someone please help?

    thanks in advance
    If your name is on the deeds of a property and you're therefore an owner, you have an interest in it which fails the test at https://www.helptobuy.gov.uk/documents/2015/12/eligibility-of-ftbs.pdf, as it's all about ownership rather than purchase, so no, you're not eligible for a HTB ISA.
  • masonic
    masonic Posts: 23,434 Forumite
    Photogenic Name Dropper First Post First Anniversary
    Options
    shabeka wrote: »
    But as i never bought the property am i still entitled to a help to buy ISA
    Let's think about this logically: Someone who has saved up and bought their own property or a share in a property is not entitled to Government assistance with future purchases. Would someone who has been gifted a share in a property be more or less entitled to Government assistance to buy another property? :think:
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.5K Banking & Borrowing
  • 250.2K Reduce Debt & Boost Income
  • 449.9K Spending & Discounts
  • 235.7K Work, Benefits & Business
  • 608.6K Mortgages, Homes & Bills
  • 173.2K Life & Family
  • 248.3K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards