If you opened a Help to Buy ISA before November 2019, you might still be wondering whether to keep contributing or fold it into a Lifetime ISA. If you are starting from scratch as a first-time buyer in 2026, the choice has been made for you—HTB ISAs are closed to new applicants—but you may still need to understand how an inherited HTB ISA stacks up against the LISA you have just opened.
This article compares both, with a focus on the practical decisions a first-time buyer faces in 2026 rather than the marketing version of either product.
At a glance
| Feature | Lifetime ISA | Help to Buy ISA |
|---|---|---|
| Open to new accounts? | Yes (under 40) | No, closed since Nov 2019 |
| Annual contribution cap | £4,000 | £2,400 (£200/month + initial £1,200) |
| Government bonus | 25% (up to £1,000/year) | 25% (max £3,000 lifetime) |
| Property price cap (England) | £450,000 | £250,000 (£450,000 in London) |
| Bonus claim point | Available at exchange via solicitor | Available at completion via solicitor |
| Investment options | Cash or stocks and shares | Cash only |
| Withdrawal penalty | 25% of withdrawal | None—but no bonus if not used |
| Age limit | Open until 40, contribute until 50 | None |
Why HTB ISAs still matter
If you opened a Help to Buy ISA before November 2019, you can keep paying in until November 2029. The bonus is claimable until November 2030, which means the wrapper still has real life left for existing holders.
The HTB ISA’s bonus structure:
- £1,200 initial deposit + £200/month thereafter.
- 25% bonus on the balance, capped at £3,000 lifetime.
- Bonus paid into your home purchase via the solicitor at completion.
A 2019 opener who has paid in monthly throughout has by now accumulated £15,000+ of contributions and earned the maximum £3,000 bonus. That is worth keeping intact rather than dismantling on the way to the LISA.
Why the LISA is the new default
For new first-time buyers in 2026, the LISA wins on every dimension that matters:
- Higher annual contribution—£4,000 vs £2,400.
- Higher bonus over five years—£5,000 vs £3,000.
- Higher property price cap outside London—£450,000 vs £250,000.
- Investment option—you can hold the LISA in stocks and shares for long horizons.
Its only real drawbacks against the HTB ISA:
- The 25% withdrawal penalty if you do not use it for a qualifying purpose, which takes back more than the bonus.
- The £450,000 cap can lock you out of London buys.
Both wrappers have age 40 as the cut-off for opening a LISA; the HTB ISA had no such limit, but it is closed to new applicants anyway.
The £250,000 vs £450,000 property cap difference
The HTB ISA’s £250,000 cap (outside London) was already a real constraint by the late 2010s; in 2026 it is far worse. UK average house prices sit around £290,000, with much of the South East and the commuter belt above £350,000. The HTB ISA effectively excludes more first-time-buyer purchases each year as prices drift.
The LISA’s £450,000 cap is significantly more accommodating but still bites in London and parts of the South East. If you are buying above £450,000, the LISA becomes useless and you will pay the 25% penalty to withdraw—the bonus you collected does not survive that exit.
Can you have both?
Yes—but only one bonus can be claimed against a single home purchase.
If you opened a HTB ISA in 2019 and a LISA in 2024, you can:
- Keep contributing to both.
- Decide at purchase which bonus to claim.
- Withdraw the unused one (HTB without penalty; LISA with the 25% penalty).
Or—and this is what most holders do—transfer your HTB ISA balance into your LISA. This is allowed and counts toward your £4,000 LISA annual cap. You then have a single wrapper with all your accumulated savings, eligible for the LISA’s higher bonus and property cap.
When the HTB ISA is still better
Two narrow cases:
- You are buying a home below £250,000 outside London and your HTB ISA has accumulated four-plus years of contributions. The combined balance plus bonus may be enough that the LISA’s higher cap adds nothing in practice.
- You opened your LISA less than 12 months ago. A LISA cannot be used for a property purchase until it has been open for a year. If your purchase is imminent and your HTB ISA is older, claim the HTB bonus.
In every other case, the LISA wins.
How the bonus actually flows
Both bonuses flow through your conveyancing solicitor:
- HTB ISA bonus—paid at completion, after the solicitor submits the closing letter to the scheme administrator.
- LISA bonus—already in your account; the solicitor requests release at exchange and the LISA provider forwards the balance.
The LISA’s earlier bonus release is a small but real advantage—the bonus is part of your deposit at exchange, not at completion. A handful of mortgage applications hinge on this difference, particularly tight 95% LTV cases where a few thousand extra at exchange shifts the LTV band.
A practical decision tree
If you are a first-time buyer planning a home purchase:
- Are you under 40? If yes, open a LISA today—you cannot open one after 40. If no, work with whatever wrappers you already have.
- Do you hold a HTB ISA from before November 2019? Consider transferring it into a LISA—but only if your LISA has been open for 12 months by the time you would need to use it.
- Will the home cost £450,000 or less? The LISA is usable. Above that, the LISA becomes a penalty trap and you should withdraw it before buying.
- Will the home cost £250,000 or less, outside London? Either wrapper works. Pick whichever has more bonus on offer for your timeline.
Beyond the bonus
Both wrappers help, but neither moves the needle as much as the deposit itself. £5,000 of LISA bonus on a £35,000 deposit is meaningful—but the rate difference between a 5% and a 10% deposit on the underlying mortgage is usually larger over the life of the loan.
For more on the deposit side of the equation, see first-time buyer deposit amounts.
For the LISA’s role in non-property savings—i.e. retirement at 60+—see stocks and shares ISA vs Lifetime ISA.
Frequently asked questions
- Can I open a Help to Buy ISA in 2026?
No. The Help to Buy ISA closed to new accounts in November 2019. Existing holders can keep paying in until November 2029 and claim the bonus until November 2030. New first-time buyers should look at the Lifetime ISA instead.
- Which ISA gives the bigger bonus?
The Lifetime ISA pays a 25% bonus on up to £4,000 a year, capped at £1,000 a year. The Help to Buy ISA pays 25% on up to £200/month plus an initial £1,200, capped at £3,000 over its life. On a five-year horizon, the LISA delivers up to £5,000 vs the HTB ISA's £3,000.
- Can I have both at the same time?
Yes—but you can only claim the government bonus from one when buying your first home. Most holders transfer their HTB ISA balance into a LISA before purchase, provided the LISA is at least 12 months old by the time the bonus is needed.
