Market-leading cash Lifetime ISA launches
The mutual becomes just the third provider to offer a cash version of the home and pension saving scheme, which is backed by the government.
The new deal pays a variable rate of 1.10% gross/AER, trumping the 1% from Skipton Building Society and Nottingham Building Society.
The Newcastle’s LISA can be opened online only with a minimum £1 deposit but it can be managed online, by phone or by post.
If you already have a LISA with another provider, you won’t be able to transfer it to Newcastle BS.
Customer director at Newcastle Building Society, Stuart Miller, said: “Helping people own their home and plan for the future is core to our purpose, and the Lifetime ISA helps both these sets of savers. Encouraging and rewarding personal saving is an important step in addressing a culture of easy credit and consumer debt that has become prevalent and ultimately reduces the ability of individuals, couples and families to save and plan for their future.”
A comparison of cash Lifetime ISA providers
The Lifetime ISA launched in April 2017, offering people aged 18-39 the chance to save up to £4,000 each tax year towards a property or pension and receive a government bonus of 25% (up to £1,000).
So far, 190,000 accounts have been opened and more than £170m has been paid out in bonus payments.
There are just three cash LISA providers, but around a dozen investment-based LISAs.
Apart from the interest rate offered on the cash versions, there are some other important differences to note.
The Nottingham’s LISA can only be opened in branch. It has 67 branches across 11 counties: Bedfordshire, Cambridgeshire, Derbyshire, Hertfordshire, Leicestershire, Lincolnshire, Norfolk, Northamptonshire, Nottinghamshire, Staffordshire and South Yorkshire.
An online version of the scheme is expected to go live before the end of the year and anyone wanting to register their interest for the online version can do so via the Nottingham website.
The Skipton has recently expanded its range of exclusive mortgages for LISA customers, offering three two-year mortgages and three five-year mortgages with £500 and £1,000 cashback.
This is on top of the £250 cashback given to all Skipton’s LISA customers who take up a mortgage with the lender.
The exclusive deals are available from 85% and up to 95% loan to value (LTV).
While an enticing offer, homebuyers should always compare mortgages to see the best deals.