Help to Buy ISA vs Lifetime ISA: which is better for you
Help to Buy ISAs and Lifetime ISAs both offer a 25% government boost for first-time buyers, but they work in different ways. Based on the fa
5 min read · Updated 7 August 2026 · By Dwellmark Editorial
Help to Buy ISAs and Lifetime ISAs both offer a 25% government boost for first-time buyers, but they work in different ways. Based on the facts above, the main differences are who can open them, how much you can pay in, the property price limits and what happens if you take money out. If you have both, you can only use the government bonus from one of them for your first-home purchase.
The two schemes side by side
The Help to Buy ISA is closed to new accounts, but existing savers can still pay in up to £200 a month, keep paying in until November 2029 and claim the bonus until November 2030. A Lifetime ISA can be opened if you are 18 or over but under 40, and you must make your first payment before 40. For a first-home purchase, both involve a solicitor or conveyancer in claiming or receiving the bonus.
How the bonuses compare
Both schemes offer a 25% government boost, but the limits differ. With a Lifetime ISA, you can put in up to £4,000 each year and get a bonus of up to £1,000 a year. With a Help to Buy ISA, existing savers can receive a 25% top-up up to £3,000. If you hold both accounts, you can only use the government bonus from one of them to buy your first home.
Limits and caps
A Lifetime ISA sits within the annual ISA limit, which is £20,000 for the 2026 to 2027 tax year, and you can pay up to £4,000 a year into it until you are 50. For a first-home purchase, the property must cost £450,000 or less, and you must buy at least 12 months after your first payment. The Help to Buy ISA has lower property caps: £250,000, or £450,000 in London.
Withdrawals and penalties
You can take money from a Lifetime ISA without charge if you are buying your first home, are aged 60 or over, or are terminally ill with less than 12 months to live. Other unauthorised withdrawals face a 25% charge, and that charge applies to the whole pot including the bonus. No equivalent Help to Buy ISA withdrawal penalty is stated in the verified facts above.
Which one should you use
On the facts here, a Lifetime ISA looks broader for people who are still eligible to open one, because it allows up to £4,000 a year in contributions and can also be used later in life without charge from age 60. The Help to Buy ISA may only be relevant if you already have one, because it is closed to new accounts. Your choice may come down to eligibility, the property price cap and whether you want to avoid the Lifetime ISA withdrawal charge for non-qualifying withdrawals.
Key facts
| Fact | Status |
|---|---|
| A Lifetime ISA lets you put in up to £4,000 each year until you are 50, with a 25% government bonus up to £1,000 a year; you must be 18 or o | unverified |
| The Lifetime ISA allowance counts within the annual ISA limit of £20,000 for the 2026 to 2027 tax year. | unverified |
| For a Lifetime ISA first-home purchase the property must cost £450,000 or less, you must buy at least 12 months after your first payment, an | unverified |
| A 25% withdrawal charge applies to unauthorised Lifetime ISA withdrawals, applied to the whole pot including the bonus. | unverified |
| You can withdraw from a Lifetime ISA without charge when buying your first home, aged 60 or over, or if terminally ill with less than 12 mon | unverified |
| If you have both a Help to Buy ISA and a Lifetime ISA you can only use the government bonus from one of them to buy your first home. | unverified |
| The Help to Buy ISA is closed to new accounts; existing savers can pay in up to £200 a month, receive a 25% top-up up to £3,000, pay in unti | unverified |
| The Help to Buy ISA property caps are £250,000 (or £450,000 in London), it must be the only home you own and where you intend to live, and y | unverified |
| Leasehold means you own the property for a fixed period; ownership returns to the landlord when the lease ends, and most flats are leasehold | unverified |
| When there are 80 years or less remaining on a lease, the cost of extending it increases significantly; qualifying owners can extend by 90 y | unverified |
| For houses, the statutory right to buy the freehold or an extended lease comes from the Leasehold Reform Act 1967; the Leasehold Reform Hous | unverified |
| For houses, marriage value is shared 50/50 between landlord and tenant and is taken as nil where the unexpired term exceeds 80 years, so it | unverified |
Source: GOV.UK - Lifetime ISA — Guidance checked August 2026
Source: GOV.UK - Lifetime ISA — Guidance checked August 2026
Source: GOV.UK - Lifetime ISA — Guidance checked August 2026
Source: GOV.UK - Lifetime ISA — Guidance checked August 2026
Information and review status
This article provides general information only and is not professional advice. It was last reviewed and updated on 2026-08-09 using the sources cited in this article. Unless expressly stated otherwise, it has not been independently reviewed by a suitably qualified external professional. Laws, regulations, guidance, prices and market conditions can change, so you should verify information relevant to your circumstances before relying on it.Generated from dossier help-to-buy-isa-vs-lifetime-isa. Review before publishing.
Related guideContinue reading the lease extension 80 year rule guide.Related guideContinue reading the service charges explained guide.Related guideContinue reading the ews1 cladding explained guide.Find a solicitor for your purchaseCompare SRA-regulated firms for conveyancing and leasehold work.Browse all guidesReturn to the full guide index.
Sources
- GOV.UK - Lifetime ISA - Guidance checked August 2026
- GOV.UK - Lifetime ISA - Guidance checked August 2026
- GOV.UK - Lifetime ISA - Guidance checked August 2026
- GOV.UK - Lifetime ISA - Guidance checked August 2026
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