Do I have to take out a mortgage from my cash Lifetime ISA provider?
There are more than a dozen providers offering the Lifetime ISA – the home and pension hybrid savings scheme backed by the government.
It offers people aged 18-39 the chance to save up to £4,000 each tax year towards a property or retirement where they’ll receive a government bonus of 25% (up to £1,000).
Lifetime ISA (LISA) savers have the option of saving into an investment or cash version. If you’ve opened a cash version from one of the three building societies, do you need to take out a mortgage deal with it once you’re ready to buy your first home?
In short, the answer is no. You’re not required to take out a mortgage from the lender where you have your cash LISA savings. But a couple offer incentives for first-time buyers.
Here’s what the mutual’s told us:
Newcastle Building Society: It just yesterday launched its cash LISA product but confirms that customers are free to get a mortgage elsewhere.
Nottingham Building Society: LISA customers aren’t required to take out a mortgage with the Nottingham. But anyone taking out its LISA will have free access to its whole of the market mortgage advice service, which usually costs £249 for non-members.
Skipton Building Society: It was the first high street lender to launch the cash LISA. While customers aren’t required to take out a mortgage with the Skipton, anyone who does so will receive £250 cash back.
It’s also recently launched an exclusive range of Lifetime ISA mortgages available from 85% and up to 95% loan to value (LTV) on three two-year mortgages and three five-year mortgages with £500 and £1,000 cash back. This is on top of the £250 cash back.