UK Help to Buy ISA vs LISA Comparison Calculator

Help to Buy ISA vs LISA Guide

What's the key thing to understand about Help to Buy ISA Rules?

The Help to Buy ISA closed to NEW applicants on 30 November 2019. Existing accounts: can continue saving until 30 November 2029, must claim bonus by 1 December 2030. How it works: government adds 25% bonus on savings — minimum £1,600 saved (for £400 bonus), maximum £12,000 saved (for £3,000 bonus). Monthly contribution limit: £200/month (£2,400/year). The bonus is ONLY paid on property completion — NOT available for exchange deposit. Property price limits: outside London £250,000. London £450,000 — these limits haven't changed since the scheme's original rules and now exclude a growing share of the London market.

What's the key thing to understand about LISA Rules (for comparison)?

LISA open to new applicants aged 18-39. Maximum £4,000/year contribution. 25% bonus paid monthly (up to £1,000/year). Property limit: £450,000 anywhere in the UK. LISA funds CAN be used for the exchange deposit (unlike HTB ISA). Must have been open 12 months before use. If you have both accounts: you can save in both simultaneously for the exchange deposit. At completion, use your LISA funds. The HTB ISA bonus is paid separately at completion. Combined bonuses possible: save £200/month into a Help to Buy ISA and £4,000/year into a LISA simultaneously, since the government allows both to be held and used together for a first home, subject to each account's own rules.

When HTB ISA Is Better?

HTB ISA gives more bonus when: your total savings are under approximately £12,000. The London property you want is under £450,000 (LISA also covers this). You have a large existing HTB ISA balance — the 25% bonus on up to £12,000 = up to £3,000. HTB ISA advantage: no withdrawal penalty for non-property use (unlike LISA's 25% charge). If your plans change and you decide not to buy, you can withdraw HTB ISA savings without penalty — very different from a LISA, which charges a 25% withdrawal penalty on the whole amount if the money isn't used for a first home or taken after age 60 — effectively clawing back more than just the government bonus.

What should I know about Combining Both Accounts?

The most powerful strategy for existing HTB ISA holders: keep contributing the maximum £200/month to the HTB ISA. ALSO open a LISA (if under 40) and contribute up to £333/month (to match the £4,000/year cap). At purchase: use HTB ISA savings for the exchange deposit (can use the full balance). At completion: solicitor claims the HTB ISA bonus (up to £3,000). LISA funds can be used for completion balance. LISA bonus also received. Combined potential bonuses: £3,000 (HTB) + up to £32,000 over the lifetime of a LISA (£1,000/year maximum for up to 32 years) — though in practice most first-time buyers use the LISA bonus for a deposit within a few years rather than the full lifetime maximum.

How the Help to Buy ISA's Bonus Worked — and Why New Accounts Are Closed

The Help to Buy ISA was a government savings scheme that added a 25% government bonus on top of what was saved, up to a maximum bonus amount, paid out only when the funds were used toward a first home purchase — similar in spirit to the bonus now offered by the Lifetime ISA, which has effectively replaced it for new savers. New Help to Buy ISA accounts stopped being available to open some years ago, though existing account holders who already had one open were generally able to continue contributing and would still receive the government bonus on first home purchase, subject to the scheme's existing rules and deadlines.

Key Differences From the Lifetime ISA That Still Matter for Existing Holders

For anyone still holding an existing Help to Buy ISA, several mechanical differences from the Lifetime ISA remain relevant: the bonus was typically claimed by the conveyancer/solicitor at the point of completion rather than received into the ISA itself along the way, there was a maximum property price cap that could differ from the Lifetime ISA's cap, and monthly contribution limits were structured differently than the Lifetime ISA's annual limit. Existing holders approaching a house purchase should check the scheme's specific completion deadline and bonus claim process carefully, since the administrative route to actually receiving the bonus differs enough from the newer Lifetime ISA that assuming the same process applies can cause avoidable delays at completion.

What Happens If You Don't End Up Buying

<p>A Help to Buy ISA was always designed around a specific goal — a first home purchase — and the rules reflect that. If you withdraw the money for any reason other than buying your first home, you lose the government bonus entirely; you simply get your own savings and any interest back, with no top-up. There's no penalty on your original contributions, unlike some other savings products that charge an exit fee for early withdrawal, but the 25% bonus that was the whole point of holding the account disappears if the money isn't used for its intended purpose. This is worth bearing in mind if plans change — a Help to Buy ISA isn't a flexible general savings account, and treating it as one by dipping into it for unrelated expenses before a house purchase quietly forfeits the bonus you'd otherwise have received. Since new accounts can no longer be opened, this consideration now applies only to those still holding and growing an existing Help to Buy ISA from before the scheme closed to new savers.</p>

Worked Example: Comparing Contribution Caps, HTB ISA vs LISA

Suppose a saver has £4,000 available to save in their first year. A Help to Buy ISA only accepts an initial deposit of up to £1,200 in the first month, plus up to £200 a month after that — so across a 12-month year that's £1,200 + (£200 × 11) = £3,400 maximum, leaving £600 unable to go in that ISA year even though the saver had the money ready. The 25% government bonus on that £3,400 contribution would be £850. A Lifetime ISA accepts up to £4,000 in the same tax year, with no monthly sub-limit, so the full £4,000 can go in straight away. The 25% bonus on £4,000 is £1,000 — £150 more than the HTB ISA bonus for the same money, purely because of the higher annual contribution cap.

This gap is one reason many new first-time buyer savers who still qualify by age (18-39) choose a Lifetime ISA over trying to open a Help to Buy ISA — though existing Help to Buy ISA holders keep their account's own rules and can continue contributing until the scheme's contribution deadline.

Deadline to Use the Bonus After the Scheme Closed to New Savers

The Help to Buy ISA stopped accepting brand-new accounts some years ago, but existing holders can typically keep saving into an account opened before the cut-off and still claim the government bonus on completion of a first home purchase, subject to the scheme's final closing date for claiming the bonus. Anyone still holding one of these accounts should check the current deadline directly with their provider or the scheme's official guidance, since using the account past that date, or outside the approved process, risks losing access to the bonus entirely. It's a scheme in wind-down rather than one accepting new savers, so the practical question for existing holders is timing a home purchase to make use of the bonus before it stops being available.

How the Bonus Is Paid at Completion, Not Into the ISA Itself

Unlike the Lifetime ISA bonus, which is typically added to the account roughly monthly as contributions are made, the Help to Buy ISA bonus is only requested and paid once, at the point of completing a first home purchase, via your conveyancer or solicitor as part of the transaction. This means the 25% top-up never actually appears inside the ISA balance itself — it's a separate payment claimed specifically for the purchase, with a minimum balance usually required (commonly around £1,600) before any bonus can be claimed at all, and a cap on the maximum bonus payable per person. Savers sometimes don't realise this and are surprised that their account statement never shows the bonus added, when in fact it was always designed to be claimed at completion rather than accrued over time.