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Are HTB ISAs worth it?

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  • diggingdude
    diggingdude Posts: 2,445 Forumite
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    your solicitor sadly is probably banging their head on their desk and thinking "there's always one"
    An answer isn't spam just because you don't like it......
  • aries_163
    aries_163 Posts: 70 Forumite
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    Go into your bank branch, close the account and get the closing statement for your iSA. The current funds in your iSA will then be transferred to an account of your choosing eg another one of your personal accounts.
    Send the closing statement to the solicitors and they will claim the bonus from the government (assuming then have time now that you have already exchanged).
    On completion date the £950 bonus will go into the !!!8216;pool!!!8217; of money your solicitor has for your house purchase.
    This means if you already have paid your full mortgage deposit to them, then they transfer £950 back to you post completion.
    It!!!8217;s a no brainier! Claim it!!!
  • mangog
    mangog Posts: 145 Forumite
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    I think you may be confused about what the HTB savings and bonus are intended for. This amount is supposed to form part of your deposit, not go towards paying off the remainder of your mortgage. The idea is that the bonus gives your deposit fund a boost because for many FTBs it's the deposit that is the biggest hurdle, not the monthly repayments (although in practice you generally still need to have funds equal to the bonus available for exchange and you get the bonus back afterwards).

    As you've already paid your deposit from funds that weren't saved in the HTB ISA I'm not sure whether you can actually claim the bonus. If you had closed the ISA before exchange and used that money towards the deposit you'd then claim the £950 bonus to be paid back to you. I don't know how it would work at this stage though because you have to show that you saved those funds in the HTB ISA by submitting a closing statement in order to claim the bonus. But it may be enough to get a closing statement now, and your solicitor may still be able to claim the £950 bonus because you can prove that you saved that same amount via the HTB ISA scheme. You'd then keep the £3800 that was in your ISA (as you've effectively already paid this in your deposit) so it's just free money ON TOP of the money you've saved. You don't have to pay the £3800 twice.

    Hope that makes sense, but talk to your solicitor about your options at this stage as I'm no expert - this is just what I've learnt from saving in my HTB ISA.

    Good luck with the move!
  • Norman_Castle
    Norman_Castle Posts: 11,871 Forumite
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    MissMarble wrote: »
    So the £3,800 would come off our mortgage payments essentially over the next 25 years?
    £3800 plus £950 is £4750. How much will that cost in interest payments over 25 years?
  • takman
    takman Posts: 3,876 Forumite
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    MissMarble wrote: »
    Hello, thank you for your reply. We've already exchanged and so the deposit came from other money we had saved. We do have some money left over from our deposit fund, however we are hoping to save the rest for furniture/more work and general back-up money. I've tried to speak with my solicitor but haven't had much luck as to what would be best to do and I've been passed through various people at the bank with the HTB queries. So the £3,800 would come off our mortgage payments essentially over the next 25 years?

    Thank you again.

    Who have you left it so late to think about using your HTB ISA, you should have closed it before exchange and got the statement ready.

    This is some misinformation in this thread but this is how it works:

    You close your HTB ISA and you get the balance plus interest sent to an account of your choice to spend how you want.
    You get a closing statement and your solicitor uses this to claim the bonus which goes towards completion funds.
    So once completion happens you should get this amount of money back because you will have overpaid in total.

    But you may have left it too late and lost out on the free money.
  • datlex
    datlex Posts: 2,239 Forumite
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    When I was ready to exchange the solicitor gave me a statement detailing my full bill including both the property value and their fees, they then showed how much was being funded, i.e. mortgage, incentive payment, fees already paid for surveys and then how much I was left to pay i.e. the deposit and remainder of their fees. At this point I went to the HTB provider and they arranged the closing statement, my solicitor advised how much I needed to pay to exchange and then on receipt of the closing statement claimed the HTB bonus. I hadn't had my HTB very long, however the bonus was more or less equivalent to my solicitors fees - so effectively I got that for free.
    Paid off the last of my unsecured debts in 2016. Then saved up and bought a property. Current aim is to pay off my mortgage as early as possible. Currently over paying every month. Mortgage due to be paid off in 2036 hoping to get it paid off much earlier. Set up my own bespoke spreadsheet to manage my money.
  • Firsttimebuyer2018
    Firsttimebuyer2018 Posts: 13 Forumite
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    Well it's 25% back free off the government? So I'd say yes! With my HTB when I closed it I had to withdraw the money from there into my own account and my solicitor then got the bonus which went towards my deposit.

    I was under the impression this isn't how it normally works! So if yours is the same you can still get your bonus but use that £3800 for home improvements.
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