Lifetime ISA Advice

The Lifetime ISA provides a simple solution for first time buyers looking to get onto the property ladder. Before you can access this advantageous government-led scheme, you must first meet the criteria of the scheme:

• You must be aged between 18 and 39 years old. You can build up your savings up to the age of 50.
• You must live in the United Kingdom.
• Your Lifetime ISA can only be used to buy your first home or as savings for later in life.
• The value of the property you are planning to purchase cannot exceed £450,000.
• Your Lifetime ISA must be open for at least 12 months before you can use the funds to buy your first home.
• The purchase must be with a mortgage.
• You must use a conveyancer and solicitor to act for you in the purchase.

Our mortgage advisors would love to answer all of your Lifetime ISA mortgage questions. Simply get in touch by booking a free mortgage appointment online or by giving us a call!

While it is possible to make withdrawals from your Lifetime ISA, it is typically advised against.

Withdrawals from your Lifetime ISA incur a penalty of 25% on the amount being withdrawn. For instance, if you’re considering withdrawing £1,000 from your Lifetime ISA, you’ll be charged £250 (25%).

This penalty is imposed because the government give you a 25% bonus to help you buy your first home, and withdrawing funds for any other purposes is not using the scheme for its intended benefit.

This is why it is advised to only add to your Lifetime ISA when you can afford to. For example, if you have a large financial commitment due within the next month, perhaps holding off adding to your Lifetime ISA that month could be wise. You can always increase your deposit the month after to compensate for not adding as much the month prior.

It is also worth knowing that you can only withdraw for your first home purchase a year after opening your Lifetime ISA.

For first time buyers in the UK, the Lifetime ISA provides a simple and effective way to save for your mortgage deposit.

The main benefit of the Lifetime ISA is the government’s 25% bonus that is added to your savings. With savings capped at £4,000 per year, your 25% bonus can stretch up to £1,000 towards buying your first home.

On top of this great benefit, your savings are tax-free. This allows you to maximise the value of your savings towards buying your first home.

Once you are ready to proceed with your property purchase, you need to reach out to your Lifetime ISA provider.

They will release the funds in your account and send them to your conveyancer and solicitor.

Releasing the funds from your Lifetime ISA without contacting your provider or following their guidelines on how to use your savings for a property purchase, you will likely face a 25% withdrawal fee.

Whilst you carry out your property purchase, our mortgage advisors can help you find the most suitable mortgage product for your new home. Make sure to get in touch with us once you have made an offer on a property so that we have plenty of time to prepare your mortgage application.

You must be between the ages 18-39 to open a Lifetime ISA.

Also, you cannot own a property; the Lifetime ISA can only be used to buy your first property.

The maximum that you can save in your Lifetime ISA each year is £4,000. If you manage to reach this total, the government will top up your savings by £1,000 (25%).

If you don’t quite reach the £4,000, the government will still top up your savings by 25% of what you managed to save. For example, if you save £2,500 in the year, the government will top up your savings by £625.

Yes, you can use your LISA to buy a house with another person. As long as this is the first property you are purchasing, this can be possible.

You also have the option to use both Lifetime ISAs for the purchase.

If you are planning to buy a property with someone who is not a first time buyer and does not own a Lifetime ISA, you can still use your LISA towards the property purchase.