Lifetime ISA for first-time buyers

Saving for your first home with a Lifetime ISA

A Lifetime ISA is a flexible, affordable way to save and invest for your first home. You can open one if you’re between 18 and 39 years old and contribute up until you turn 50.

Every year you can save up to £4,000 towards your first home, and the government will add a 25% bonus to whatever you put in – worth up to £1,000 a year. As with other ISAs, money in a Lifetime ISA can grow free from UK tax, including any returns you make on your investments.

A stocks and shares Lifetime ISA is a great way to invest over the long term for a new home. However we would suggest that if you’re planning to purchase a home in less than five years, a cash Lifetime ISA could be more suitable. Being invested in the stock market for five years or more gives you a better chance of avoiding short-term stock market volatility.

Remember investments can fall as well as rise, so you could get back less than you put in. Tax rules can change and benefits depend on individual circumstances.

Open a Lifetime ISA

Using a Lifetime ISA to buy your first home

A Lifetime ISA is a great way to save for your first home, but there are some things to consider.

• You need to be a first-time buyer (this means you don’t own, and haven’t owned, a residential property anywhere in the world)

• It must have been at least 12 months since the first payment into the Lifetime ISA before you can use the money to buy a home without facing a withdrawal penalty

• If you have a Help to Buy ISA, you can only use one government bonus towards your purchase, so be careful choosing which account you use

• If you’re buying with someone else who is also a first-time buyer, they can use their own Lifetime ISA and their government bonus too

If you’ve had your Lifetime ISA open for at least 12 months, you can then use the money you’ve saved towards your first home. If you want to use it before having the account open for a year or need the money for something that isn’t a first home and you’re younger than age 60, then you may have to pay a 25% withdrawal charge.

About your first home

• The property must be in the UK

• The purchase price must be £450,000 or less and the amount withdrawn must be less than the purchase price

• It will need to be your main home or become your main home as soon as it’s ready if it’s still being built

• You’ll need to be buying the house with a mortgage or regulated home purchase plan

If you don’t meet the conditions for an eligible property purchase, you can still use your Lifetime ISA money towards buying a property. But you’d have to pay the government withdrawal charge, which means you could get back less than you put in. You could instead use it for later life. If you’re not using your Lifetime ISA to purchase your first property, you can usually access the money from age 60.

Steps to buying your first home with a Lifetime ISA

Here are some of the steps you can expect when buying your home with a Lifetime ISA.

1. Find out how much you can borrow

Speak to a professional to find out how much you can borrow and see how much you need to save with your Lifetime ISA.

2. Find your best mortgage offer

Shop around to find your best mortgage offer – it might not always be with your bank, so make sure you do your research.

3. Access the money in your Lifetime ISA

To use your HL Lifetime ISA to purchase your first home you’ll need to send us the Lifetime ISA home purchase form, telling us about your conveyancer and how much you want to withdraw.

We’ll keep your Lifetime ISA funds safe until then. Once you’ve requested the withdrawal, we’ll speak to your conveyancer handling your purchase and once everything is ready, then transfer the funds that you instruct us to directly to them.

What are the benefits of a Lifetime ISA with HL?

• Trusted by 1.9m clients - HL is the UK's number one platform for private investors.

• Automatic bonus - we’ll claim your government bonus and add it to your account automatically.

• Wide investment choice and expert research - choose from thousands of investments and our latest funds ideas. You can even get expert guidance to help you decide where to invest and build your own portfolio, or ask for personal advice if you need it.

• Easy and simple to manage - check your Lifetime ISA on the go, online or with the HL app.

• Award winning - HL have won over 200 awards including Best Buy Lifetime ISA 2024 from the Boring Money Awards.

• Free to set up, and a maximum annual fee of 0.25% - no charge to buy or sell funds, or to stop and start payments. Funds also have their own annual charge and dealing fees for shares are capped. View full charges.

Help and support

If you have any questions about the HL Lifetime ISA, you can speak to one of our UK-based client support experts.

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