How to use your LISA to get a mortgage

If you have saved enough money in your Lifetime ISA (LISA) and you’re ready to get your first home, we’ve created an easy guide to help make your first step onto the property ladder as seamless as possible.


Am I eligible to use my LISA?

There are certain requirements you have to meet in order to withdraw from your LISA penalty free. These are:

  • The property must cost £450,000 or under

  • You are getting your mortgage at least 12 months after opening and funding your LISA

  • You use a conveyancer or solicitor to act for you in the purchase

  • You are a first time buyer

  • The property will be your main residence

Make sure that you meet all the criteria before going forward with getting your mortgage otherwise you will be charged a 25% withdrawal penalty. 

How much can I borrow?

Once you know you are eligible and meet the criteria to use your LISA for your first home, you need to find out how much you can borrow from your mortgage lender.

As well as a range of other factors, lenders will take into consideration your salary, or joint salary if you are getting a joint mortgage, your credit score and your outgoings, in order to determine how much you can borrow.

Our mortgage affordability calculator can give you an estimate of what you would be able to borrow. However, if you would like a definitive quote, you can get a mortgage in principle from your lender.

How do I access my LISA?

When getting a mortgage, your tax-free LISA, including the government bonus, must be paid directly to your conveyancer or solicitor. If you withdraw the money directly yourself, you will be charged.

Your conveyancer will need to apply directly to your LISA provider to release the funds in your account. The money has to be released less than 90 days before you get the keys and if the sale falls through, your conveyancer or solicitor will repay the money (including your bonus) into your LISA account.

How is the bonus paid?

Your bonus is calculated and deposited into your account on a monthly basis.

The amount you receive is based on how much you have contributed to your account from the 6th of the month to the 5th of the succeeding month. The bonus will be added to your LISA within two weeks of the 20th of the following month.

So if you contribute £100 to your LISA between the 6th March and the 5th April, you will receive an added 25% (£25) in your LISA account within two weeks of the 20th April.

Can I use my LISA for a joint mortgage?

Yes, you can use your LISA for a joint mortgage, so long as it is the first property you will be purchasing.

You can also use two separate LISAs to purchase a mortgage if you are both first time buyers. However, if the person you are sharing the mortgage with is not a first time buyer, you can still use your own LISA to contribute to the mortgage.

If you want to know more about buying your first home, we have more information and tools just for you. Our first time buyers’ guide also offers a fantastic step-by-step guide to getting your first mortgage.

We offer a great range of LISA Mortgages that have been designed exclusively for our Lifetime ISA account holders, or talk to your provider to find out their offers. Want to speak to us? Give us a call or visit us at your local Newcastle Building Society branch to speak to one of our Mortgage Advisers.

I've been affected by COVID-19 (coronavirus) am I able to withdraw from my LISA without paying a withdrawal penalty?

Yes, on the 1st May 2020 HM Treasury announced Lifetime ISA holders whose income had been affected by the COVID-19 (coronavirus) pandemic would pay a reduced withdrawal charge if accessing funds early.  

Between 6th March 2020 and 5th April 2021 (inclusive), to help people who need to access to their money earlier as a result of the outbreak the charge to make an unauthorised withdrawal from a LISA has been reduced from 25% to 20%. This will mean you will only have to pay back any government bonus you have received and the money you have invested will not be affected.  However, LISA holders are strongly encouraged not to draw out money from their LISA unless it is absolutely essential. 

After 6th April 2021 it is expected the withdrawal charge will go back up to 25%. Which means if you then don't go on to use the savings in your Lifetime ISA towards the deposit on your first home and/or towards your retirement after saving for a minimum of 12 months, a 25% penalty will apply to the amount you withdraw. This will recover the government’s bonus and you will get back less than you have saved.

Your mortgage will be secured on your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

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