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  • FIRST POST
    • Oasis1
    • By Oasis1 19th Sep 18, 1:00 PM
    • 457Posts
    • 415Thanks
    Oasis1
    Can you use a LISA and H2B ISA to buy a house?
    • #1
    • 19th Sep 18, 1:00 PM
    Can you use a LISA and H2B ISA to buy a house? 19th Sep 18 at 1:00 PM
    I read MSE articles on these two ISAs but couldn't quite work this out...


    Is there any way to 'max out' a H2B ISA, then start putting money into a LISA and then combine the two to buy a house? I have a feeling the answer is no because the way the bonuses are paid.

    I currently have 8056 in Halifax's Help to Buy ISA (until recently it had a great 3% interest rate, now 2.25%, and I opened it as soon as H2B was available). I expect this to reach 12,000 by April 2020, making it eligible for the maximum 3,000 bonus.

    If I haven't bought a house and don't want to at this point, is it worth transferring this into a LISA and then continuing to contribute? Or should I just start a LISA now and transfer in the H2B?

    Essentially, I'm trying to maintain the flexibility of the penalty-free H2B until April 2020 incase I need to withdraw cash, whilst also being able to get more than a 3,000 bonus through LISA. Not possible, right?

    How are LISA bonuses paid? If I have 100 in there, how is the 25% bonus added to it? Is it 25%/12 each month added so 2.08? Does that mean the bonus compounds each month?

    Regardless, I should probably stick 1 in Skipton's LISA just to keep my options open, right?

    I also wondered if this might be a sensible compromise. I could switch to Barclays' higher 2.58% interest H2B ISA, max that out, and then start contributing to a S&S LISA. Then when I want to buy a house, I'll use whichever has the biggest amount (inc. bonus). If that's H2B, great, I'll have a pension investment product leftover with the S&S LISA and if it's the other way around, I can withdraw the H2B ISA money penalty-free, which will have still benefited from a not bad interest rate and then invest it elsewhere.

    Any advice/comments to untangle this would be appreciated.
    Last edited by Oasis1; 19-09-2018 at 1:29 PM. Reason: Wrong bonus percentage

Page 2
    • aj23
    • By aj23 25th Oct 18, 9:35 AM
    • 1,112 Posts
    • 353 Thanks
    aj23
    And here's the first scenario spreadsheet for reference


    Originally posted by Oasis1
    Are you implying that you'd get 307 from Barclay's at 2.58% on a 3,400 yearly deposit? (You've written 2,400, which is wrong for the first year). Because you wouldn't.
    • eskbanker
    • By eskbanker 25th Oct 18, 11:06 AM
    • 11,887 Posts
    • 14,672 Thanks
    eskbanker
    Are you implying that you'd get 307 from Barclay's at 2.58% on a 3,400 yearly deposit? (You've written 2,400, which is wrong for the first year). Because you wouldn't.
    Originally posted by aj23
    No, you're misinterpreting it - as per previous posts, OP already has a HTB, which will have 9500 in it by next March, hence different columns for 'year deposits' and 'total deposits'....

    Having said that, the interest calculation is flawed, as it isn't as simple as 11,900 x 2.58% = 307 when the balance starts the year at 9,500, so as a crude approximation the average balance over the year will be more like 10,700, giving 276 interest.
    • aj23
    • By aj23 25th Oct 18, 2:18 PM
    • 1,112 Posts
    • 353 Thanks
    aj23
    It's just generally a bit muddled. It's not a good table.
    • Oasis1
    • By Oasis1 23rd Nov 18, 12:28 PM
    • 457 Posts
    • 415 Thanks
    Oasis1
    It's just generally a bit muddled. It's not a good table.
    Originally posted by aj23

    Here's the table: https://we.tl/t-0WtPkN4cHr


    I'd welcome any suggested edits you have.

    • EhiEhizode
    • By EhiEhizode 10th Nov 19, 8:39 PM
    • 1 Posts
    • 0 Thanks
    EhiEhizode
    No each person can only use one of the products towards their property purchase so choose wisely and read the T&C's carefully. LISA bonuses are added into the account shortly after, and based on, the contribution and HTB ISA bonuses are claimed by the solicitor during the property purchase based on the closing balance.

    You can only transfer or contribute up to 4k per tax year into a LISA.

    Alex
    Originally posted by Alexland
    Hey!!
    I'd really appreciate some clarification on this comment.
    I've got a LISA and a HTB ISA and I max them both out each year and month respectively. I thought I'd be able to use both to buy property and my understanding was that I'd only be able to get the 25% government bonus on one of them. I was planning to use the bonus on my LISA as I've been able to put more money into that account. From what you've said, will I not be able to do this then?
    • eskbanker
    • By eskbanker 10th Nov 19, 11:58 PM
    • 11,887 Posts
    • 14,672 Thanks
    eskbanker
    Hey!!
    I'd really appreciate some clarification on this comment.
    I've got a LISA and a HTB ISA and I max them both out each year and month respectively. I thought I'd be able to use both to buy property and my understanding was that I'd only be able to get the 25% government bonus on one of them. I was planning to use the bonus on my LISA as I've been able to put more money into that account. From what you've said, will I not be able to do this then?
    Originally posted by EhiEhizode
    Just to be clear, you can only benefit from the 25% government bonus towards a first-time property purchase from either the LISA or an HTB but not both, but there's nothing stopping you from making a penalty-free withdrawal from a LISA (where funds will already have been boosted by the bonus) and also using the balance of an HTB ISA (without bonus).
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