Best Help to Buy ISA

Best Help to Buy ISA

The Help To Buy ISA scheme was available to all applicants up to 30 November 2019. There are still options for you, even though the deadline is now past. For the latest information, see our guide.

Many first-time buyers have heard from us. They are looking for a mortgage and many of them want to use a Help To Buy ISA as a way to increase their deposit.

Many people want to find out how to get the best interest rates for a Help To Buy ISA, or if there are other options to help the mortgage deposit. Others want to learn about mortgages that may be available once they have used a Help To Buy ISA account in order to save their deposit in savings accounts.

We have compiled the most important information for first-time buyers who are looking for the best Help To Buy ISA.

Use our online mortgage calculator as a guide for your monthly repayments now

How to get the best interest rate on an ISA

First-time buyers often ask if they will receive interest on a Help To Buy ISA and a government bonus.

To get the best interest rates on a Help To Buy ISA, you must look at the entire market and not just the products available from a bank or building society in your local high street or shopping centre.

There are many government scheme providers offering the Help To Buy ISA out there.

Some you may not have heard of, but all of them have the same FSCS backing as well-known brands on the high streets – so your money will be safe.

It’s all about finding the right Help To Buy product and interest rate for you. You could speak with our mortgage advisers who can give you the best advice free of charge.

They have full access to the market so you can be sure that you’ll be matched up with the best buy ISA provider most suited to your circumstances and offer the best rates.

Are you able to get help to buy ISA interest monthly or annually?

There are Help To Buy ISAs available that both pay monthly interest and those that pay annual interest. There is no scientific consensus on which method is best. The choice of the loan option will be based on the borrower’s preference.

The goal of a Help To Buy ISA to save a deposit for a property purchase is likely to mean that the savings will remain in the savings account for some time. It may be nice to get the lump sum of interest every year, but if your goal is to save money and see the balance grow each month, the monthly deposit plus the interest could be the best option.

How to find help to buy ISA account providers

It can be difficult to find the best Help To Buy ISA deal. It is important to understand what you are comparing to have the most suitable buy ISA bonus for you. The mortgage advisors we work with could save you time and help you save more money.

These are some things you should discuss with your broker as you consider the different options.

All of our mortgage brokers are regulated by the financial conduct authority and will offer free advice to get the best government bonus ISA accounts for you. The mortgage broker’s ISA manager’s aim is to get you the maximum bonus you are entitled to, they will explain the buy ISA rules to you.

New applicants contact us today, if you are not entitled to a cash ISA we will recommend the best way for you to save for a mortgage loan.

Monthly Deposits

Some providers require a minimum monthly deposit. This means that you must deposit at least £10 (or more) with certain providers. Otherwise, the interest rate could be reduced.

Some providers don’t have a minimum monthly deposit requirement. If you decide not to deposit for one month or even two months, it will be fine. You cannot roll over your monthly deposit allowance up to £200 if you miss a month.

ISA Transfers

Consider this: If you already have a cash ISA, some providers will allow you to transfer an ISA from previous tax years to your Help To Buy ISA. This will give you a boost in your balance and possibly help you to get more government bonuses.

You may not be able to transfer an ISA into or out of certain providers. If you are interested in securing the best rate each year, check that they allow transfers of Help To Buy ISAs.

It is important to understand that there is a process for transferring ISAs. This process is controlled by lenders.

Transferring money from an ISA to another account and then into another provider ISA could result in you not being able to pay into any ISA until the next tax year.

Accessibility

Do you want to be able to view your savings online and access them? Do you prefer a bank account with a passbook and a branch? You could see your funds but you would need to travel to the branch to withdraw them.

You could also be in the “I would rather forget that the funds were there” bracket and have only postal access. These are all things you should discuss with your broker when comparing Help To Buy ISAs.

Withdrawals

While you may initially save for a deposit, there will be times when you need to access the money for other purposes. Most Help To Buy ISA providers offer immediate access accounts, which means that you can access your money whenever you need it.

It would be helpful to note that withdrawals from a Help To Buy ISA do not count towards your balance for bonus purposes.

Interest rates: Monthly or annually

As we have already mentioned, interest on a Help to Buy ISA can either be paid monthly or annually. The majority of monthly-paid interest was earned by people who wanted to earn income from their investments or savings. However, it should not be a major difference for someone who is saving for a deposit. The majority of Help To Buy ISAs have compounding interest that is calculated daily. This means there should not be any difference in taking your Help To Buy ISA interest either monthly or annually. It would all come down to personal preference.

Help to Buy ISA vs Lifetime ISA (LISA: Which is the best ISA for a first-time buyer?

Although Help to Buy ISAs are well-established, a Lifetime ID0_ (LISA), was introduced in April 2017.

A Help To Buy ISA is only for those who want to save money for their first home. The Lifetime ISA can also be used for those who are looking to save money for retirement.

These are the key differences in a help to buy ISA and Lifetime ISA:

Deposits

• A lifetime ISA (LISA) allows you to deposit as much as £4,000 annually, compared to £2,400 for a Help to Buy ISA.
• You can deposit lump sums of up to the £4,000 total yearly allowance, and/or deposit monthly, as opposed to being able only to save a maximum of £200 per month into a Help To Buy ISA.
• A lifetime ISA LISA allows you to invest in shares and stocks, while a Help To Purchase ISA only allows cash.

Bonuses for government

• The Help To Buy ISA offers a 25% bonus, as well as the lifetime ISA LISA. However, the bonus potential for the lifetime ISA LISA could be higher due to the possibility of depositing more each year (up to £4,000 instead of £2,400).
• A bonus on a lifetime Isa LISA may be paid for a longer period than the four years / £12,000 that is provided by the Help To Buy ISA. The lifetime ISA Lisa for homeowners can pay a bonus each year starting at the time the account was opened and ending at the age of 49.

Withdrawals

• Help To Buy ISAs can be very flexible and you can get instant access to your savings, without any penalty to withdraw money.
• The lifetime ISA LISA cannot be modified. You cannot withdraw money. Funds can not be withdrawn after the account’s 1st anniversary or any time thereafter to buy a property. However, if funds are needed for anything other than a deposit to buy a property, a 25% fee will be charged. This could leave you with less than what you paid.

Depending on your financial goals and needs, you will need to decide whether to choose a Help to Buy ISA (or a LISA).

You can contact our one of our mortgage experts to discuss your options and receive the best advice on your first-time buyer ISA.

As a first-time buyer, get a plan

It is important to plan and have a goal. Also, know your options. Having a savings account saving a deposit needs to be done earning you interest. Saving in the first-time buyer ISA for a £250,000 property would not be a good idea if you can’t afford to make the monthly mortgage payments.

These are just a few other things you should consider when creating a plan.

• What amount can you save each month? (Be realistic).
• Which type of property would you like and for how much?
• What is your goal (how much deposit are you able to afford)?
• What amount of a mortgage can you get? And what are your financial limits?
• Keep or improve your credit rating/profile

You need to be aware of the fact that things like mortgage interest rates, house prices and criteria may fluctuate. It is better to know the whole picture before you start saving.

You will see that many of the items in this list are interconnected. If you didn’t know the other, you won’t be able to identify the first.

Contact today to speak to an expert who can help you get the best advice and create a plan.

What mortgage products can you get after using a Help To Buy ISA?

There is a common misconception that you are required to get your mortgage with the same provider you used for your ISA. This is false. You can use any lender that meets your criteria. Sometimes, there might be a ‘special deal’ offered by certain banks or building societies that encourages people who have used the bank or building society to save enough money to get the mortgage.

Which bank is best for a Help to Buy ISA Mortgage?

This question is not easy to answer because every lender offers different products, and interest rates can differ across lenders.

The right Help to Buy ISA mortgage provider for you depends on your circumstances and needs. Our whole-of-market broker network can help you match you with the lender who is most likely to offer you the best rates.

Send us an enquiry, and we’ll connect you with one of them to provide bespoke advice and access the right lender for your customer profile.

Talk to an expert about Help to Buy ISAs

One of our expert mortgage advisors will be available to answer your questions regarding Help To Buy ISAs and other topics in this article. Contact us today to make an enquiry.