UK Mustachians i summon thee! (help pretty please)

[mohawkbrah]

So im confused on where i should focus funneling money into first. My gross income is £13400/year. I plan on being a first time house buyer. should i max out the help to buy isa first as my calculating goes a bit like this

Help to buy ISA:
max contributions = 2400/year
santander yearly interest = 4%
government top up when purchasing first home, up to £12k ISA value = 25%
12k/2400/yr = 5 years = 145% return over 5 years
total contributions after 5 years = £12k
Total ISA size after interest + gov top up after 5 years = £16303

is the help to buy isa a good idea if im going to be purchasing a house within 5 years time? obviously any longer than 5 years and i start to see poorer returns compared to equity investments

*edit*

just heard there's now a new and improved version of the help to buy which is now the lifetime isa coming next year, where there's no max cap on how much the gov tops up (still 25%) (and now 4k/yr instead) and also lets you invest in stocks instead of fixed interest rates. Sounds like this would be best to invest in first and then the stocks and shares ISA?

[daverobev]

You DO NOT want to invest in stocks for 5-year time frames. That's general, not UK, advice. You want guaranteed, government-backed-insured stuff (ie, if the bank folds, your money will still be safe - any normal bank account, bank savings account etc will be fine up to 85k GBP I think it is, maybe it's gone up to 100k not sure).

I don't know the specifics or gotchas of this new ISA stuff. How much are houses where you are?! 13k salary doesn't sound like it'd support much of a mortgage (that's not meant to put you down, just the truth). Even at 4x, you'd only be borrowing 52k max.

But yeah, if the government is going to give you a free top up for nothing, go for it. Are you sure it isn't only for new-builds or something?

[cerat0n1a]

I think you've answered your own question - assuming you've no credit card or other debt and you've got a bit of an emergency fund, the help-to-buy or lifetime ISA is your best bet. Are you still thinking about buying outside the UK - might be worth checking that you're allowed to use it for that?

[Friar]

is the help to buy isa a good idea if im going to be purchasing a house within 5 years time?

Yes. If you're going to be spending those savings on your first property then it's free money from the government, but you appear to already be aware of this so I don't really understand this question.

[Squirrel away]

http://www.theguardian.com/money/2016/mar/19/lifetime-isa-budget-first-time-buyers-workplace-pension

[mohawkbrah]

is the help to buy isa a good idea if im going to be purchasing a house within 5 years time?

Yes. If you're going to be spending those savings on your first property then it's free money from the government, but you appear to already be aware of this so I don't really understand this question.

i was more asking whether i have any facts wrong or if im misinformed. basically seeing if their are any smart people here that might need to correct my thinking