Last day to open a Help to Buy ISA
With today being the final day left to open a Help to Buy ISA, those saving for a deposit for their first home are being urged to open one now, as even after the scheme ends they can still deposit money into the account and benefit from the 25% Government bonus.
Help to Buy ISAs end today, 30 November, but once opened, savers can continue paying into the account until 30 November 2029 and can claim the 25% bonus up until 1 December 2030.
To open the account, an initial deposit of up to £1,200 is allowed and then monthly deposits of up to £200 are permitted. It offers a maximum bonus of £3,000 and, to gain this, savers would need to save £12,000 into the account. For savers unable to save the maximum £12,000, a 25% bonus will still be added to any amount over a minimum of £1,600. The bonus is only added to the full amount saved in the account and is not added until mortgage completion, with the bonus payment being arranged on behalf of the saver by their solicitor. Savers can withdraw money from a Help to Buy ISA without using the money to purchase a house, however they will lose the bonus if they do this.
Savers who miss out on opening a Help to Buy ISA can still get a 25% Government bonus by opening a Lifetime ISA (LISA) instead. The main difference is that a LISA can only be opened by those aged 18-39 and the money saved can only be used to purchase a first home or for retirement. Savers can deposit up to £4,000 into the account each year and the 25% bonus is added yearly, which means that savers could receive a maximum bonus of £32,000.
Product Spotlight: Three-year fixed rate bonds
If you don’t want to lock your money away for too long but are looking for a better return than short-term investments, a three-year fixed rate bond could be just the thing:
• The Premier Deposit Account from Bank of London and the Middle East (BLME) sits top of the chart, offering an expected profit rate of 2.20% AER on the anniversary of opening. From a minimum deposit of £1,000, this account stipulates that savers must have or open a BLME transfer account to hold funds pending investment. This account must be opened online and then operated by post. BLME operates under Islamic finance principles.
• UBL UK’s 3 Year Fixed term Deposit is a close second, paying a rate of 2.20% AER on a minimum deposit of £2,000 with interest being paid on the anniversary of opening, on maturity or monthly. Withdrawals are allowed but attract a penalty of 270 days’ loss of interest. The account can be both opened and managed in branch or by post.
• The Fixed Term Deposit account from Gatehouse Bank, paying an expected profit of 2.00% AER on the anniversary of opening, completes the top three. There is a minimum deposit of £1,000 and this account, which can only be opened and operated online, is subject to Islamic finance principles.
Top products – At a glance
Fall in 10-year mortgage rates
Competition in the long-term fixed rate mortgage market has pushed down rates on 10-year fixed mortgages, research from Moneyfacts.co.uk reveals.
The research shows that, compared to a year ago, there are now more 10-year fixed rate mortgages on the market and average rates have decreased by 0.32% from 3.08% to stand at 2.76% today. In fact, in November 2018 there were 147 10-year mortgage deals available on the market, whereas today there are 158.
While rates in the 10-year fixed chart are not as low as those being offered in the two and five-year charts, there are still a number of highly competitive rates available for borrowers looking to lock their mortgage into a 10-year term.
Commenting on the fall in 10-year fixed mortgage rates, Darren Cook, Finance Expert at Moneyfacts.co.uk, said: “During a period of economic uncertainty, borrowers may be considering alternative ways to shield themselves against interest rate fluctuations and assure some stability in household expenses for the longer-term. A 10-year fixed rate mortgage is a large commitment, so potential borrowers need to feel confident that their circumstances are unlikely to change in the foreseeable future to benefit from the longer-term certainty that this product provides.
“As with any mortgage, it is important that borrowers weigh up the overall true cost of any deal and make every attempt to overpay their mortgage to reduce the amount they owe – especially if they lock into a low rate.”
Product Spotlight: Two-year fixed rate mortgages for home-movers
If you’re looking to move home and want to lock your mortgage repayments into a short-term deal, a two-year fixed rate moving-home mortgage could be the right option for you.
• Halifax offers a rate of 1.08% (3.7% APRC) fixed until 28 February 2022, reverting to 4.24% variable thereafter. This deal is available to borrowers with a 40% equity in their property (60% loan-to-value) who are looking to borrow a minimum of £100,000. It charges £995 in product fees and offers the flexibility of being able to overpay or take payment holidays.
• NatWest Intermediary Solutions offers a rate of 1.19% (3.7% APRC) fixed until 31 March 2022, which then reverts to 4.24% variable. This deal is available to house purchase customers with a 40% deposit/equity in their home (60% LTV) and who require a minimum loan of at least £25,000. It charges £995 in product fees and includes the incentive of free valuation.
• Barclays Mortgage offers a rate of 1.21% (3.8% APRC) fixed until 31 January 2022, after which it reverts to 4.24% variable. This deal is available to all borrowers types with at least a 40% deposit/equity in their home (60% LTV). It charges £999 in product fees and includes the incentive of free valuation for homes valued under £2 million, while remortgagers also have a choice of free legal fees or £250 cashback.
Consumers to spend an average £1,522 this Christmas
Consumers are expected to spend an average of £1,522 each during the festive season, with the most money being spent on Christmas getaways, gifts and hosting parties, research from American Express reveals.
On average, consumers are predicted to spend £458 on Christmas getaways, which is followed by £312 on gifts and £124 on hosting parties, the research found. In addition to this, consumers are also planning to spend money on travel (£119), gatherings (£112), new clothes (£112), festive experiences (£108), Christmas Day food shopping (£102) and Christmas decorations (£75).
For those planning to use a credit card to meet the costs of their Christmas spending and who are unable to pay off the full balance on their credit card, a 0% purchase credit card could be a good option. MBNA Limited sits at the top of our 0% purchase credit card chart offering 0% for 26 months on purchases made in the first 60 days on its 0% Transfer and Purchase Credit Card Mastercard. Santander is second in the chart offering 0% on purchases for 26 months with its All in One Credit Card Mastercard. This card also offers 0.5% on cashback on purchases. Third in the chart is Barclaycard, which offers 0% on purchases for 25 months on its Platinum All-Rounder Visa.