The ASP savings and subsidy scheme is designed for young first-time home-buyers, aged 15–39. ASP agreements commit home-buyers to saving a minimum of 10 per cent of the price as a down payment for their first home, while the bank is committed to granting them a loan once they reach their savings target. ASP interest subsidy loans are low-cost and the interests are partly paid by the state.
ASP advance saving principles:
- Home-buyers must make a deposit of EUR 150–3000 into their ASP savings account in at least eight fiscal quarters. The deposits do not have to be made in consecutive fiscal quarters. The interest and supplementary interest on the deposits are also counted as savings.
- ASP agreements can be altered or moved to another bank during the saving period, and the loan can be granted by a bank other than the one where the deposits were made.
- Other finances than those in the ASP account may be used towards the cost of the home. However, they will not be counted as ASP savings.
- ASP assets cannot be withdrawn until the agreement terms have been met and the depositor has signed a sales contract or begun the construction of the home. The home can be bought when the home-buyer has made at least half of the agreed ASP deposits. Any temporary funding is to be agreed on separately.
- Plots for single-family houses can also be covered by ASP agreements.
- f the depositor withdraws the ASP assets or buys the home too early, the agreement is cancelled.
The bank pays an interest rate of 1% on the deposits. When the savings target has been reached and the purchase or construction of the home is completed, an additional interest rate of 2–4 % is paid. Both the interest rate and the additional interest rate are tax-fee.
ASP interest subsidy loan
Mortgages can be fully or partly accepted as interest subsidy loans, unless the buyer has other state support for purchasing the home. The maximum amounts for interest subsidy loans in various municipality groups:
- Helsinki: EUR 180 000
- Espoo, Vantaa and Kauniainen: EUR 145 000
- Other municipalities: EUR 115 000
Interest rates on loans covered by interest subsidies are agreed with the bank together with other repayment conditions. Banks are obliged to grant such loans at lower interest rates than those charged on loans given to other first-time home-buyers. There can be no more than two instalment-free years in the interest subsidy period. The limitations of the interest subsidy loan conditions do not apply to loans granted by banks, insofar as they exceed the accepted limit of an interest subsidy loan.
ASP loans can be granted the limited state guarantee of mortgages for owner-occupied homes without a separate application process. Part of the ASP interest is paid by the state for the first 10 years. The subsidised amount is 70 per cent of the annual interest rate of the loan which exceeds 3.8 per cent of the remaining principal. For example, if the interest rate is 5.8 per cent, the subsidised amount is 70 per cent of the difference between 5.8 and 3.8 percentage points, i.e. 1.4 per cent. The borrowers have a right to make tax deductions on their interest expenses.
Spouses and persons sharing a home are entitled to one interest subsidy, even if they have separate loans. If two ASP home-owners purchase a shared home, the overall amount of the loans must correspond to the maximum loan amount at the moment of purchase.
For minors (under 18) it must be specified in the home saving agreement that the deposits made consist of the personal earnings of the minor.
Guidance/application: State Treasury, interest subsidy unit, tel. +358 (0) 295 502 248
Regulations: Senior Adviser Jorma Pietiläinen, The Ministry of the Environment, t. + 358 (0) 295 250 228 email@example.com