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Find out more about us17th February 2020
A mortgage deposit is likely to be the single largest item you save for across your lifetime. Given its size, the government has in place a number of schemes that make it easier to save for and take the first step onto the property ladder.
Among these are various types of ISAs – savings accounts designed to give a boost to your hard-earned cash. But which is the best for saving for a mortgage? Let’s take a look.
The government’s Help to Buy scheme has been the most important ISA in saving for a mortgage over the past few years. Unfortunately, it’s no longer possible to open a new account on the scheme as the government discontinued it on 30th November 2019. If you already have one though, you’ll be able to continue paying into it until 2029.
Whilst the Help to Buy scheme is no longer accessible for new savers, there is an alternative ISA to help you build a mortgage deposit. Lifetime ISAs let you save up to £4,000 a year towards a deposit or a retirement fund, and gives you a 25% bonus from the government to help you reach your target faster. You could therefore stash away £5,000 annually, plus any tax-free interest on top. The maximum bonus you can receive with a Lifetime ISA is £33,000 (or £32,000, if you’re born on or after 6th April, the end of the tax year).
Generally speaking, you get more out of a Lifetime ISA than you would with a Help to Buy ISA. You do however sacrifice flexibility. Here’s our breakdown of the main pros and cons of Lifetime ISAs for saving for mortgage deposit when compared to a Help to Buy ISA.
Saving for a mortgage deposit can feel like an uphill struggle. With a Lifetime ISA though, you can make the load a little easier and reach your deposit target faster. If you’re currently exploring ways to save for a new home, then get in contact with IMC Financial Services. Our expert financial advisors will be able to help you find the best way to build up your savings and once you have, our mortgage brokers will be able to secure you the best loan deals available.
It’s important to us that you get to know who is looking out for your financial future. Meet our team and discover our experience and see why we are perfectly placed to provide you financial advice.
Find out more about us