Build your future – open an ASP account and save for the key to your first home!

The ASP account or ASP-loan, short for AsuntoSäästöPalkkiotili (ASP-tili) which is the abbreviation for the Finnish bonus system for the first-time home savers, is intended to help individuals aged 15 to 44 in acquiring their first home by streamlining the buying procedure. Thus, the ASP provides a cost-effective way to accumulate funds for purchasing a first home. Once you have accumulated 10% of the dwelling's purchase price, you could be eligible for the remaining amount as an ASP loan from the bank.

Main terms for opening an ASP account

• An agreement to set up an ASP account is formed between the individual saving through the ASP program and the bank.
• An ASP account may be opened by individuals who are within the 15-to-44-year age range.
• The individual opening the account must not have owned property before.
• ASP account holder has to accumulate savings amounting to a minimum of 10 % of a home's buying price to may become eligible to receive an ASP-loan from the bank. Note that in case you have accumulated over 10% of the future home's purchase price on your account, the interest paid to the ASP account remains tax-exempt, even if not all funds are used for home buying.
• Apartments financed with the ASP loan must be located in Finland, and the saver must acquire a minimum of 50% of the condominium shares or the detached house to qualify for the loan.
• The system aims to foster saving for a home and ease the possibilities of purchasing the first dwelling. Thus, the property financed with an ASP loan must be the borrower's permanent personal dwelling.

Advantages of an ASP account

• You have the option to initiate your savings with a modest monthly deposit of just 50 euros.
• The ASP account offers tax-exempt interest with a 1% annual return on deposit, plus an extra 2-4% interest upon meeting savings goals and buying a home. The additional interest is granted for the initial year of the account and for five years thereafter, once eligibility criteria are fulfilled.
• The interest accrued on an ASP account is exempt from taxes upon the borrower's purchase of a home, provided all conditions are met.
• The state provides an interest subsidy for the initial ten years of your loan, covering 70% of the interest exceeding 3.8%, thus guarding against rising interest rates.
• The ASP loan can come with the added benefit of a state guarantee, which is offered free of charge. This implies, the home purchased and the state guarantee suffice as collateral for ASP funding, negating the need for additional security.
• Using ASP loan, you'll benefit from a lower interest rate compared to standard new housing loans.

Additional terms, obligations and restrictions for an ASP loan

• The saver is required to deposit between 150 and 4,500 euros quarterly into their ASP account for a minimum of two years (or eight calendar quarters). Nonetheless, it's not necessary for the deposits to be made in consecutive quarters.
• The cap on the ASP interest subsidy loan varies according to the home's geographic location:
  

  Apartment's municipality	Highest loan amount, EUR
  Helsinki	230 000
  Espoo, Vantaa and Kauniainen	185 000
  Tampere and Turku	160 000
  Other municipalities	140 000

• When two savers buy a shared home, whether through a joint or separate ASP agreements, they may be eligible for an ASP interest subsidy loan up to 50% above the municipality's maximum per home, using either a joint loan or separate loans.
• The ASP loan can cover up to 90% of the home's purchase price or a detached house's construction costs. If it is insufficient, the saver may arrange an additional ordinary mortgage with the bank.
• A saver can use ASP benefits for buying their first home in the new property being built.
• For the construction of a detached house, the plot can be included in ASP financing if its cost is in the project's estimate and construction begins right after purchase. Also, the cost of a plot associated with a condominium may count towards the ASP loan if bought with the apartment.
• The ASP interest subsidy loan's rate must be less than what the bank offers first-time home buyers on other similar loans, with benchmarks like Euribor used as a reference rate.
• The loan term can be up to 25 years, with the repayment method negotiable between the saver and the bank.
• The ASP account can be transferred to another bank during the saving period, with savings continuing seamlessly in the new bank.
• An ASP property may be partially rented out, provided the borrower occupies over half of it as their permanent residence. A single-room (studio) apartment, however, cannot be sublet.
• A home purchased with an ASP loan may be leased for up to two years for exceptional reasons such as employment or education in another municipality. However, renting beyond two years, even with valid reasons, is prohibited, precluding the use of an ASP loan for buying investment apartment.
• Misuse of ASP loan funds for non-sanctioned purposes can lead to the cancellation of the interest subsidy. Under these circumstances, the borrower may be required to return an amount up to quintuple the received subsidy to the State.
• Withdrawing funds from the ASP account before meeting the agreement terms will end the ASP arrangement. The saver may then use the savings for purposes other than buying a first home, but will forfeit the right to tax-exempt interest benefits of the account.

ASP depositor (saver). Who is entitled to ASP account?

• People aged 15–44.
• Persons who has never owned an apartment before (persons purchasing their first home).
• However, an ASP account can still be opened if the saver has received a specific share (less than 100% ownership) of an apartment as a gift or inheritance. Receiving an apartment as a gift after opening an ASP account won't impact the ASP benefits as well.
• The savers (e.g. married partners, people in registered partnership) can have either one joint ASP account or separate ASP accounts. Thus, a spouse or another person can be added to an existing ASP agreement, provided they meet the saver's criteria.
• Married spouses and registered partners may jointly participate in ASP saving, even if one partner is over 45. This also applies to couples in a relationship if they have, or have had, a child together or if they have previously been married/registered. Other attached savers must comply with the specified age criteria.
• Two savers with separate ASP accounts can buy a home together, saving individually on their own accounts until the requirements of the ASP loan are met. They can take out either a joint loan or individual loans.
• Conversely, the joint ASP account can be split, allowing each saver to continue saving onto their own accounts. If a partner over 44 was added to the ASP account or if it was a joint account opened at that age, the partner cannot continue as an ASP saver on their own.
• The person under 18 years old can make an ASP agreement at a bank only together with the guardian. An underage person can deposit money earned solely from own work (e.g. wages). The main condition is that the funds are required to be income from employment and cannot be received as a gift (e.g. survivors’ pension, inheritance, gift by parents and grandparents or other people, child benefit or financial aid for students are not considered as assets saved through the labour).
  A minor saver can arrange with the bank for additional interest calculation from either the deposit start date (maximum of five years) or when they turn 18. Should the additional interest start accruing at age 18, only the standard 1% interest applies to deposits made between ages 15 to 17.

More information can be found at State Treasury website.