Lifetime ISA Explained in Newcastle

Mortgage Advice in Newcastle

Following the discontinued Help to Buy scheme in 2019, home buyers began exploring other schemes that could help them get onto the property ladder. One of these was the Lifetime ISA.

Introduced in 2017, the Lifetime ISA gives First Time Buyers an easy approach to raising money to buy a property. Alternatively, it can also be used to save for later in life. We are a Mortgage Broker in Newcastle, therefore, this article will focus on how you the Lifetime ISA can be used to save for a property. It will also show the scheme requirements and how it can benefit you as a First Time Buyer in Newcastle.

Our YouTube channel features an in-depth explanation of the Lifetime ISA. Feel free to watch the video below or visit the channel and check out more of our free educational content!

What is the Lifetime ISA?

The Lifetime ISA is only available to First Time Buyers. This is because you are expected to have the funds available when it comes to selling and moving home. The government specifically wanted to help First Time Buyers get onto the property ladder.

The way the scheme works is that you have an interest-free independent savings account which you build up and put money into (just like a typical savings account). There are no limitations to how much can you deposit into your ISA, there is only a £4,000 yearly cap. Whatever you manage to save in the year will also be topped up by the government by 25% of your savings.

The savings are worked out every tax year, therefore, you will receive a 25% bonus every year around April. If you manage to save £4,000 in the tax year, you will receive £1,000 in your Lifetime ISA account. This makes your yearly savings sum up to £5,000.

You must be aware that once your money has been deposited into your Lifetime ISA, it cannot be withdrawn without a 25% charge. If you want to take out £1,000, you will only receive £750.

How can I spend my savings?

When you are using the Lifetime ISA to fund your first property purchase, do not withdraw from your ISA to use the funds as a deposit. When you are starting your mortgage process, simply tell your Mortgage Advisor in Newcastle that you have a Lifetime ISA and they will explain how this part of the process works.

The Lifetime ISA is still available to those currently renting. This does not affect your application as you have never owned a property before. We recommend building up your Lifetime ISA for a couple of years prior to buying a property. This way you are able to benefit from a few yearly government bonuses.

If you are wanting to use this scheme to save for later in life, check out the government’s official webpage: https://www.gov.uk/lifetime-isa.

Are there any restrictions?

There will be some requirements that you will have to pass before being able to open your Lifetime ISA. Here is what you will need to look out for:

  • You need to be a First Time Buyer in Newcastle, buying your first home
  • You can only save a maximum of £4,000 per year
  • The property that you are buying must cost £450,000 or less
  • You must be under the scheme for a least a year before you can make a purchase
  • You must be over the age of 18 but under 40


If you fit into the scheme’s criteria or are unsure whether you qualify, feel free to get in touch. As a Mortgage Broker in Newcastle, it is our job to help you through the mortgage process from the very beginning, even at this stage. We say that the earlier that you get started the better!

Mortgage Advice in Newcastle

The Lifetime ISA is a great way for First Time Buyers in Newcastle to get onto the property ladder. With time and investment, the ISA could boost your deposit which could open you up to a higher loan to value mortgage deals (also dependent on a good credit score and affordability).

If already have a Lifetime ISA in place, now is a great time to get in touch and speak to one of our Mortgage Advisors in Newcastle. We have helped many First Time Buyers with Lifetime ISAs before, and you could be next.

Interest-free, tax-free and simple! What more could you want as a First Time Buyer looking to save for your first housing deposit?


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