Using your ISA bonus when buying
Claiming your ISA bonus at the right time is crucial to a smooth property purchase. This article explains the process for both the Help to Buy ISA and Lifetime ISA, and highlights common mistakes to avoid.
In this guide
When is the Help to Buy ISA bonus paid?
The Help to Buy ISA bonus is paid at the point of completion, not exchange. This is a critical distinction because your solicitor cannot use the bonus to fund the exchange deposit. You need to have enough cash available for the exchange deposit without relying on the government bonus.
Your solicitor will claim the bonus from the government after you exchange contracts. The process takes a few working days, and the bonus is then added to the funds used to complete the purchase. Make sure your solicitor is familiar with the process and factors in the timing.
When is the Lifetime ISA bonus paid?
The Lifetime ISA bonus is paid monthly into your account, so it is already available as part of your savings when you come to buy. You withdraw the funds from your LISA provider by submitting a property purchase withdrawal request, which includes details of the property and your solicitor.
The withdrawal process can take up to 30 days, so you need to start it well before your completion date. Your solicitor will coordinate the timing, but starting the withdrawal promptly avoids delays on completion day.
Common pitfalls to avoid
The most common mistake with the Help to Buy ISA is assuming the bonus can be used for the exchange deposit. It cannot. If your exchange deposit is 10% and you do not have enough cash without the bonus, you will need to negotiate a smaller exchange deposit with the seller or find additional funds.
With the Lifetime ISA, the main risk is not starting the withdrawal process early enough. If your LISA provider is slow to process the request, it can delay completion. If you are ready to move forward, you can get a quote to see your options. It is also important to check that the property price does not exceed £450,000, as this would make you ineligible for the bonus and trigger the withdrawal penalty.
Related guides
More guides in our help to buy isas mortgage hub.
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