How you can get help towards buying your first home
With the closure of the Help to Buy ISA and the Lifetime ISA replacing it, new applicants may be able to benefit from both schemes if they apply before November 30. If you are a first-time buyer of a home you can currently still open a Help to Buy ISA, even if you only have a £1 to put in it. You should also look at investing in a Lifetime ISA, as both will give out free money to first time buyers.
What Classes as a First Time Buyer?
A first time buyer is someone who has never owned a property in any capacity anywhere in the world. If you’re buying a home with someone who has owned a property before, you still qualify.
H2B ISAs and LISAs Compared
A H2B ISA is more readily available for a broader range of people. To qualify for a H2B ISA, you must be over the age of 16. With this ISA you can save up to £1,200 in your first month, and up to £200 in the months after. This would qualify you to receive a government bonus on up to £12,000 worth of savings. Opening a H2B ISA before it no longer exists in November and saving as much money as you can for two years could get you around £1,450 worth of bonus cash.
LISAs can only be opened by people aged 18-39, so if you are over 40 then it’s definitely time to open a H2B ISA while you still can. The benefit of a LISA is that the bonuses are a lot bigger, sometimes by thousands of pounds. Each tax year you can save up to £4,000. Saving this amount each year for three years would earn you a bonus of £3,000.
Which One Should You Choose?
If you’re aged 18-39 and want to purchase a home that costs under £450,000, can save £4,000 each year and aren’t planning on buying within a year, the LISA is definitely the better option for you. It will award you with a bigger bonus if you meet all three of these criteria.
If you’re older than the specified LISA age bracket and need to buy a property quicker or aren’t saving as much you’ll be better off with a H2B ISA.
Hopefully this offered you some good information on the subject, check out our other blogs/articles for other money saving, budgeting, etc. tips