Using your Lifetime ISA to buy your first home
You’ve worked hard to save your deposit into your Lifetime ISA but what next? Here’s a step-by-step guide to using your savings to buy your first home.
Step 1: Apply for your mortgage
You’ve taken the first major step and opened your Lifetime ISA. You’ve worked hard to save every payday and you’re getting nearer to buying your first home. But how do you actually buy one? First things first it’s time to get a mortgage.
Check out our article on the mortgage application process to find out all about the steps involved in getting a mortgage and chat to an expert to get your homebuying dreams on the way to reality. There’s lots of questions around homebuying that a mortgage adviser can answer such as:
- how much you could borrow
- the deposit you’ll need
- what your monthly repayments might be
- how long the mortgage process could take
- what the mortgages jargon means
Why not use our mortgage calculator
to get a rough idea of how much your monthly repayments could be? All you have to do is add how much you think you want to borrow, over how many years and add a mortgage rate. With our handy calculator we'll also let you know how much you'll have to repay throughout the whole length of your mortgage. We’ve also created a deposit calculator
that can give you an idea of the size of deposit you’ll need to buy your first home. This’ll help you work out how long you’ll need to save into your Lifetime ISA too.
Don't wait until you've saved enough of a deposit before talking to a mortgage expert. Head to the app to find Marketplace for our carefully crafted mortgage experience and all our handy tools. You can find out more about the house buying process here.
Plus, did you know that when you save for your first home with Beehive we guide you through the whole process with Milestones? These are handy tasks and reminders to keep you on track on the journey to buy your first home.
Our mortgage partner - Mortgage Advice Bureau
We’re proud to have teamed up with one of the UK’s leading mortgage brokers who will help Beehive Money savers looking to get onto the property ladder with the right mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1.00%, but a typical fee is 0.30% of the amount borrowed. You can find out more about them on the first-time buyer mortgage page.
Step 2: Release the funds!
Sounds a bit like a cartoon villain’s catchphrase, right? It’s a bit better than that. It’s time to withdraw your Lifetime ISA savings to buy your first house! Here are the steps you need to take to use your savings.
How to withdraw money from your Lifetime ISA
- Download the Model Investor declaration form provided by HMRC, fill it in and send it to your conveyancer.
- Your conveyancer fills in their own form, called the Model Conveyancer declaration and sends it together with your Model Investor declaration to us here at Beehive. You can email it to email@example.com and we’ll get to work releasing your savings.
- This release of funds can take a maximum of 30 days but typically it’s completed within 2 weeks.
- Within 10 days of sale completion, your conveyancer will let us know the details of your house purchase to confirm that your savings have been used to buy your first home.
- Your Lifetime ISA account will remain open, and you can continue to save into it for your retirement if you’d like to as you’ll still benefit from the Government bonus.
Can I use my Lifetime ISA with another first-time buyer?
Yes, you can use your Lifetime ISA with another first-time buyer who also has a Lifetime ISA but this isn't compulsory. If you both have a Lifetime ISA, the maximum property value of £450,000 still applies.
What if my completion is delayed?
If your property purchase is going to take longer than 90 days then your conveyancer must notify us and can apply for an extension. If your conveyancer returns less than the amount initially withdrawn, you’ll be charged a 25% Government fee on the shortfall amount so you may get back less than you put in.
Will I get charged for withdrawing my savings?
If you withdraw money for most other reasons other than buying your first home or after you’ve reached the age of 60. If you need to withdraw money from your LISA that you’re not putting towards your first home, you’ll be liable to pay a 25% Government withdrawal fee which means you could get back less than you paid in. You won’t incur a fee if you’re using the funds to buy your first home and you've had a Lifetime ISA account for over 12 months.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.