Help to Buy ISA or Lifetime ISA

There are two government ISA schemes for first time buyers and both pay government bonuses on top of the tax-free interest. While you can have both accounts (if you meet the criteria), you can only benefit from the bonus on one of them to buy your first home. So it makes sense to compare the two before deciding which one might be best for you. Tax rule may change in future.

What’s a Help to Buy ISA?

As the name suggests, the Help to Buy ISA is specifically for people saving for a deposit on their first home. The Help to Buy ISA scheme is scheduled to end on 30 November 2019; however you can still claim the government bonus and save into a Help to Buy ISA until December 2030.

What’s a Lifetime ISA?

Introduced in April 2017, the Lifetime ISA (LISA) is aimed at people either saving to buy their first home and/or for their retirement. Ours was the first Cash Lifetime ISA available to savers.

  Lifetime ISA Help to Buy ISA
Who can open an account? Anyone aged 18 to 39 Any who's aged 16 or over and is genuine first time buyer
Amount you can save per year Up to £4,000 £2,400 (£3,400 in the first year)
Amount you can save per month No restrictions £200 (£1200 in the first month)
Interest Paid at the rate of the account Paid at the rate of the account
Maximum bonus £32,000 (over 32 years) assuming a maximum contribution each year and the account is opened at the age of 18 £3,000
Bonus paid Paid monthly on each month's deposits until the age of 50 Added to the account balance on completion of mortgage
Home buying restrictions Can be used for a first home up to £450,000 in value Can be used for a first home up to the value of £250,000 (£450,000 in London)
When can you use the funds towards buying your first home? 12 months after your first payment into the account. Once you have saved £1600.
Can you withdraw money if not for your first home? Yes after the age of 60 but if earlier you will incur a government withdrawal charge*. Yes at any time, you just don't get the bonus.

Important Information

*Any withdrawals within the first 12 months of your first payment into a Lifetime ISA will incur a 25% government withdrawal charge, which would mean you would get back less than you paid in. After that, you can withdraw money to buy your first home, but for any other withdrawals before the age of 60, the government withdrawal charge will apply (unless you are diagnosed with a terminal illness).

Transferring your Help to Buy ISA to our Lifetime Cash ISA

While we don’t offer Help to Buy ISAs, we can help you transfer yours to our LISA, if you decide that this is a better option for you.

Any transfer from a Help to Buy ISA will count towards your current year's LISA allowance of £4000.

Plus there is an exclusive offer of £250 cashback for any of our LISA customers who go on to take out a mortgage with us. Please see the terms and conditions below.

*£250 Cashback mortgage terms and conditions

Subject to our normal affordability assessment and lending criteria at the time, Skipton Lifetime ISA customers who are buying their first home with a Skipton mortgage will be eligible for £250 cashback following completion of their mortgage. This offer is only valid for mortgages completing from 6 April 2018 to 30 June 2027. Cashback will be paid for new mortgages where at least one of the applicants is a Skipton Lifetime ISA customer buying their first home. If the mortgage is in joint names and with another Skipton Lifetime ISA holder, only one cashback amount will be paid. Cashback will only be available once.

Security is required for any loan.

Next Steps

We make the process as simple as possible. So get in touch today.

Apply online

Find out more and apply for our Lifetime ISA

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Using your Lifetime ISA to buy your first home

We’ve pulled together what you need to know about using your Lifetime ISA to buy your first home.

Lifetime ISA for first time buyers

Lifetime ISA Frequently Asked Questions

Read our frequently asked questions about Lifetime ISA to help you quickly find the answers you need.

Lifetime ISA FAQs
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