ASP in short
ASP is a system based on the Act on Bonus for Home Savers, which allows for the state to support young people in purchasing their first owner-occupied apartment. The State Treasury provides advice to banks on applying ASP regulations.
You can open an ASP account at the bank if you are 15–39 years old and you have never owned an apartment before. When you have saved at least 10 per cent of the purchase price of the apartment, the bank may grant you an ASP loan.
The benefits of ASP interest subsidy loans include
- tax-exempt interest and additional interest on your savings
- a lower interest rate on your loan compared to similar first home loans granted by the bank
- a government interest subsidy for ten years
- a government guarantee free of charge.
The ASP agreement
Before starting saving, you must sign an ASP agreement with the bank. The agreement contains information on the ASP account and the terms of making deposits. The ASP agreement specifies the tax-exempt 1 per cent annual interest paid by the financial institution and the additional interest of 2–4 per cent.
The ASP account
You can open an ASP account if you are 15–39 years old and you have not owned an apartment previously. The agreement may include a married partner who has turned 40. If you are a minor, you may sign the agreement at the bank together with your guardian.
You cannot open an ASP account if you have previously owned 50 per cent or more of an apartment. You may, however, still open an ASP account if you have been given a specific share of an apartment (less than 100 per cent) gratuitously, i.e. as a gift or inheritance. An apartment that you have been given after you have opened an ASP account will not impact your ASP benefits.
You may transfer the ASP account from one bank to another during the saving period. The transfer of the ASP account to another financial institution must be complete at the time of the closing of the sale. The bank that has granted you the ASP loan must pay the additional interest to your savings.
You must save at least 10 per cent of the purchase price of the apartment (so-called required savings). If you purchase an apartment together with someone, you must save 10 per cent of the purchase price of the share you are going to own (at least 50 per cent of the apartment). If you are planning on building a detached house, you must save 10 per cent of the cost estimate.
You must make deposits in at least eight calendar quarters to your ASP account. The deposits must amount to at least 150 euros and up to 3,000 euros during one calendar quarter, i.e. three months. However, you do not need to make deposits in consecutive quarters. Instead, you may have a break from saving, if necessary. You can continue saving for as long as you like.
The bank pays an annual interest of one per cent on deposits to the ASP account. In addition to this, you are eligible for an additional interest of 2–4 per cent, once you have reached your savings goal and are purchasing the apartment. The additional interest is paid for the first year of deposits followed by up to five calendar years.
In addition to deposits, the interest and additional interest paid to savings are calculated into the required savings. In addition to this, the required savings may include other assets in your bank accounts.
If you have saved more than ten per cent of your future apartment’s purchase price into the ASP account, you may agree on how to use the excess funds with your bank:
- If all of the assets are used to pay for the purchase price of the apartment, the tax-exempt additional interest is paid on the entire savings. Note: The ASP agreement may include a clause stating that the additional interest is paid for another sum (e.g. 10 per cent of the purchase price of the apartment).
- According to guidelines issued by tax authorities, the interest paid to the ASP account is fully tax-exempt even if the entire deposit is not used to purchase an apartment.
The ASP agreement is terminated if you withdraw funds from the ASP account before you have met the terms of the agreement.
You can agree with the bank on interim financing, if you want to purchase the apartment before the terms of ASP saving have been fulfilled. This requires, however, that you have made deposits to the ASP account during at least four calendar quarters. If you purchase an apartment before you have made at least four deposits, the ASP agreement is terminated. This means that you will no longer be eligible for the ASP benefits.
The total loan is agreed in writing at the time of agreeing on the interim financing, even if you did not need to raise interim financing or you only needed to withdraw one instalment. When you meet the ASP terms, the interim financing is paid off using the funds in the ASP account and the ASP loan.
The terms of the interim financing are agreed with the bank, and ASP loan terms are not applied to this form of financing. Interim financing cannot come from parents or family members. Instead, it must be a loan granted by the bank. Neither can own funds be utilised at this time.
You can apply for a state guarantee (up to 20 per cent of the loan) as security for the interim financing, if necessary. In this event, a 2.5 per cent guarantee fee is paid for the guarantee sum, which is not returned to the customer once the interim financing is replaced with the ASP loan. When the interim financing with the state guarantee is later replaced by the ASP loan, the state guarantee may be up to 25 per cent of the loan (see State guarantee for an ASP loan). The guarantee is free of charge for ASP loans.
After you have purchased the apartment, you must continue to make deposits into your ASP account until the sum reaches the amount of required savings. When you purchase an apartment using interim financing, you must agree with the bank on the savings schedule for the missing deposits and the time at which the interim financing is replaced with the ASP loan.
Interim financing must be replaced with the ASP loan within three months of meeting the criteria for an ASP loan, i.e. when the required savings and calendar quarters are fulfilled.
Changes to the ASP account
You can make changes to the ASP account during saving. You can add your spouse or another person to your ASP agreement after the account has been opened. The prerequisite here is that the person attached to the account also meets the criteria set for savers. A married partner can be attached to the account even if they have turned forty. Other attached savers must meet the required age limit.
After joining, at least one shared and approved deposit (150–3,000 euros) must be made to the account during one calendar quarter, i.e. three-month period, before the apartment is purchased.
Two separate ASP accounts
Two savers with their own ASP accounts can purchase a shared apartment. The savers may have separate loans or one shared loan. If the loan is shared, both savers must have made the required number of approved ASP deposits to their own account in order for the loan to be granted as shared. In addition to this, the savers must have saved 10 per cent of the purchase price of their own share.
When the funds in two separate ASP accounts are used to purchase a shared apartment, a maximum of 3,000 euros in total is taken into account per calendar quarter. Only approved deposits (150–3,000 euros per calendar quarter) are observed in calculating the ASP interest subsidy loan. All of the deposits can, however, be observed in the 10 per cent required savings. If deposits exceeding 3,000 euros have been made per calendar quarter, the exceeding amount is considered so-called other personal assets.
Dividing the ASP account in the event of separation
In the event of separation, a joint ASP account can be split between the savers so that both parties continue saving onto their own accounts. The savers may agree on new saving goals with the bank. When the account is split, the required minimum deposit amount per calendar quarter may be under 150 euros.
If the savers are a married couple, the spouses may purchase their own respective ASP-loan apartments only after the divorce has been finalised. If a married partner was attached to the ASP account or the joint ASP account was opened when they were over 39 years old, they cannot continue as an ASP saver on their own.
The other spouse may also be removed from the savers to the account, in which case the account remains solely with the other spouse.
Terminating the ASP account
You can end saving onto the ASP account and use the savings for other purposes than purchasing your first home. However, this means that no tax-exempt interest in accordance with the terms of the ASP account will be paid on the savings.
You can always open an ASP account again if you are the right age and have not owned any apartments. If you wish to reopen your account, you must make a new ASP agreement with the bank.
Transferring an ASP account to another bank
You can transfer your ASP account to another bank. The transfer of the ASP account to another financial institution must be complete at the time of the closing of the sale. The bank must ensure that the account history is provided to the receiving bank.
Underage ASP savers
You can start ASP saving at the age of 15–17. If you have not yet turned 18, you can sign the agreement together with your parent or guardian. Saving requires that you have earned the deposited money yourself.
Money that you have earned by working includes
- weekly and monthly allowances that are paid to the ASP saver’s wages account (the money must be earned from work, it cannot be given as a gift)
- stipend from school, for example.
The following are not assets that you have saved by working
- survivors’ pension
- child benefit
- financial aid for students.
Money given as a gift by parents, grandparents or other people cannot be deposited into the tax-exempt ASP account of a minor person.
A minor saver must provide an account of the deposits they have made to the ASP account at least once a year. You can use a form drafted by the State Treasury or a report on your taxable income issued by the tax office to provide your account of the deposits. The bank may also use a form of its own for this purpose. The bank must keep the forms for any later use.
A minor saver may agree with the bank whether the additional interest to be paid when the apartment is purchased is calculated from the start of the deposits or the date when the saver turns 18.
If the calculation of the additional interest is started when the saver turns 18, only the normal one per cent interest is paid on any deposits made when the saver is 15–17 years old.
When the saver has saved the required savings, the bank may grant the ASP loan. Receiving ASP benefits requires that the apartment is used as a permanent personal dwelling by the ASP saver.
The amount of the ASP interest subsidy loan is calculated based on approved deposits made into the ASP account (savings multiplied by nine). Approved deposits, the one per cent basic interest and the additional interest paid on the deposits, are all observed in the calculation of the interest subsidy loan.
The loan may be up to 90 per cent of the purchase price of the apartment or the cost estimate for the construction of a detached house. If the ASP interest subsidy loan does not cover the 90 per cent share of the purchase price of the apartment, you can agree on an additional loan with the bank.
The maximum amount of the ASP interest subsidy loan is determined based on the location of the apartment:
Municipality, where the apartment is located Maximum loan amount (euros) Helsinki: 180,000 Espoo, Vantaa and Kauniainen 145,000 Other municipalities 115,000
The payment of the purchase price is always started with the funds from the ASP account. Once the funds in the ASP account have been used, you may use other funds of your own, followed by loans.
The state guarantee can only be applied in connection with making the purchase.
The interest rate of the ASP interest subsidy loan must be lower than the interest rates of other similar loans granted by the bank for first-time home owners. General reference rates applied to housing loans may be used as a reference rate. Interest rate hedging cannot be applied to ASP loans.
The loan period may be up to 25 years, and you can agree on the manner of repayment with your bank.
Government interest subsidy for an ASP loan
The state pays an interest subsidy if the interest rate applied to the ASP loan exceeds 3.8 per cent. The interest subsidy is paid for the first ten years starting from when the loan is first raised. The interest subsidy is paid through the bank so that the bank charges the interest, minus the portion paid by the government, from you. The State Treasury pays the interest subsidy to the bank twice a year (on 31 May and 30 November).
The interest subsidy covers 70 per cent of the portion of the interest rate that exceeds 3.8 per cent. When the interest rate of the ASP loan is less than 3.8 per cent, the borrower pays the entire interest.
A maximum of two instalment-free years can be applied to the loan during the period of the interest subsidy or government guarantee. You are only eligible for an instalment-free period during the period of the government guarantee if you are unable to pay your loan due to illness, unemployment, family leave or similar economic reasons (special financial grounds).
If you wish to repay your ASP loan ahead of schedule, you may agree on the repayment schedule freely with the bank.
The interest subsidy ends if the apartment is sold and the loan is repaid. If a specific share of the apartment is sold, the ASP interest subsidy loan must be repaid in proportion to the sale.
Government guarantee for an ASP loan
If necessary, you can have a free-of-charge government guarantee applied to an ASP interest subsidy loan. You must agree on the guarantee in writing during the loan negotiations before you close the sale on your apartment. The amount of the loan with a government guarantee may be up to 90 per cent of the purchase price of the apartment.
In addition to the ASP interest subsidy loan, the government guarantee can also be applied to the so-called ASP additional loan. The guarantee may be up to 25 per cent of the loan sum in both instances. The guarantee is free of charge for ASP interest subsidy loans, but the guarantee is subject to a fee when applied to additional loans. The maximum guarantee sum per apartment is 50,000 euros.
If a government-guaranteed ASP loan is transferred to another apartment, the amount of the government-guaranteed loan cannot exceed 85 per cent of the purchase price of the apartment. In this event, the guarantee may be up to 20 per cent of the loan sum.
Apartments eligible for the ASP scheme
Apartments bought using the Home Saver’s Bonus scheme must be located in Finland. You must purchase at least 50 per cent of the housing company shares or stakes or the detached house to be able to utilise the ASP agreement.
In connection with construction, the plot may also be part of ASP financing, if the price of the plot is included in the cost estimate of the project and construction is started within six months of purchasing the plot. The share of the plot allocated to a housing company cannot be observed when calculating the ASP loan.
- A parking space cannot be covered by an ASP loan.
- A company loan share can be included in the purchase price, as long as it has been valued and verified per apartment and it is paid off as soon as possible.
- A part-ownership apartment can be bought if at least 50 per cent of the shares will be owned by the borrower and at least 50 per cent of the shares or stakes are being traded.
- You cannot utilise an ASP loan to finance right-of-occupancy housing.
- The apartment must be used for personal use as a dwelling after the sale.
- The ASP loan can be used to purchase an apartment that is rented at the time of the sale. In this event, the apartment must, however, be taken into personal use as a permanent dwelling within six months of closing the sale, and the borrower must terminate the lease immediately after the sale is closed.
An apartment where the ASP saver is already actually living before the purchase is made cannot be an ASP apartment. As an exception to this rule, an apartment where the saver rents a room or an apartment purchased from the saver’s parents can be utilised as an ASP apartment.
- The above on renting a room does not apply if the apartment was partly or fully in the use of the saver before the rent agreement was made.
- The saver can buy an ASP apartment or part of an ASP apartment from their own parents (at least 50 per cent). The apartment must be used for the personal use of the saver as a permanent dwelling, and it can no longer be used by the parents as a dwelling.
- Trades between spouses or cohabitants are not permitted.
- The remaining share of an apartment inherited or gifted earlier for partial ownership can be bought from the parties to the estate (at least 50 per cent).
ASP loans for new property
The ASP saver may also be eligible for ASP benefits to purchase their first home from a new property being built. The ASP saver may be involved in a joint building project and fund the apartment they are going to own, or parts of it, with ASP savings and the ASP loan, which can be withdrawn in instalments as construction progresses.
Any additional or amendment work commissioned by the buyer during the construction phase of the new property can be included in the total price of the apartment, in which case their costs can be covered by the ASP loan. The bank must document the amendment work in a reliable manner and attach the documents to the bill of sale.
The reservation fee charged during the advance promotion of the apartment cannot be paid with ASP savings or the ASP loan, as they can only be withdrawn at the time of the sale.
When the ASP saver’s required savings are met, the purchase price of the apartment may be paid using ASP savings and the ASP loan in accordance with the payment schedule specified in the bill of sale. The sale price and the unencumbered price of the new property is usually divided into several instalments:
1) First instalment of the sale or purchase price at the time of signing the bill of sale
The first instalment of the sale price is paid using ASP savings, and if necessary, by utilising an ASP interest subsidy loan or additional loan. ASP savings are always used to pay the sale price first before raising a loan.
2) Instalments paid during construction
The instalments of the sale price due during construction are paid by first using the remaining savings in the ASP account and then an ASP loan or additional loan.
3) The last instalment of the sale price (after completion)
The remaining sale price is paid with any remaining ASP savings followed by an ASP loan or additional loan.
4) The saver’s share of company debt (if they want to pay it off)
The company debt allocated to the apartment may be included in ASP funding upon agreement. In this case, the 10 per cent required savings are calculated based on the unencumbered price of the apartment. If you wish to utilise an ASP loan to pay for your share of the company debt, you must make an agreement with the bank by the time the deal is closed. The allocated share of company debt is paid using the ASP interest subsidy loan or additional loan, where permitted by the terms of the company.
5) The redemption price of the share of the plot allocated to the apartment
The redeemed share of the plot cannot be covered by ASP funding, because the allocated share of the plot to be redeemed will not be in the saver’s name, but the company’s.
Transferring the ASP loan
ASP funding can be transferred to a new apartment, if the new apartment is intended for the personal use of the saver as a permanent dwelling. You must agree on transferring the loan with the bank, and the sale price is deposited into the collateral account of the bank for the transition period.
- The first home must have been sold before the loan can be transferred.
- You must own at least 50 per cent of the following apartment.
- The next apartment must be acquired within six months of selling the previous apartment.
If you have not purchased the next apartment or started construction within six months, you may apply for a six-month extension on the validity of the interest subsidy loan from the State Treasury. The application must arrive at the State Treasury before the six-month period has elapsed. A copy of the bill of sale for the first home must be attached to the application.
The application will be processed by the State Treasury within one week of receipt, and the applicant will be notified of the decision via e-mail or letter.
If the new apartment is not purchased within the six-month extension period, the interest subsidy is deemed expired when six months have passed since the apartment was sold.
The ASP interest subsidy loan can be transferred as is, if it is possible in terms of the purchase price of the apartment. Any difference in price can be paid by taking out an additional loan.
- The new apartment costs 150,000 euros.
- The sum of the valid ASP interest subsidy loan is 85,000 euros, 21,250 euros (25 per cent) of which are guarantees.
- A total of 85 per cent (127,500 euros) of the new apartment may be covered by the state-guaranteed loan. Up to 20 per cent of this sum, i.e. 25,500 euros, may be guarantees.
- The existing ASP interest subsidy loan is transferred as is, which means that the sum of the new government-guaranteed loan may be up to 42,500 euros (127,500–85,000 euros) and 4,250 euros (25,500–21,250 euros) of this may be guarantees.
- A guarantee fee must be paid for the additional ASP loan.
Renting the ASP apartment
The ASP apartment may be rented for up to two years. Renting the apartment requires special circumstances, which may be studying or working abroad or in another location (outside the commuter area). Military service is also considered a special circumstance.
You must provide a written account of renting your apartment to the municipal housing authorities. Currently, however, these reports are sent to the State Treasury. If there are no grounds for renting the apartment, the State Treasury notifies the loan recipient of this. In this event, the ASP loan must be modified into a conventional housing loan.
You can sublet your ASP apartment. You must, however, use more than 50 per cent of the apartment for your own permanent dwelling. You cannot sublet a studio apartment.
- The Act on Bonus for Home Savers (1634/1992) with amendments made later
- Decree on Bonus for Home Savers (1636/1992) with amendments made later
- Act on Government Guarantees for Owner-Occupied Housing Loans (204/1996) with amendments made later
- Decree on Government Guarantees for Owner-Occupied Housing Loans (605/1999) with amendments made later
- Act on Interest Subsidy for Loans Granted for Home Purchase (639/1982) with amendments made later
- Decree on Interest Subsidy for Loans Granted for Home Purchase (672/1982) with amendments made later