Saving for your home with an ASP account

Unfortunately many foreigners living in Finland have acknowledged that home prices are too high for them. Either they don’t have enough income, cash and securities or a combination of these and thus receive no bank loan. If you are in above situation, a so-called ASP account can be the solution for your problem.

What is an ASP account?

The ASP system allows the state to support young people in purchasing their first owner-occupied apartment. First one opens an ASP account at a bank and starts saving for the future home. When the saving period is over the bank grants a defined home loan with extra benefits (ASP-loan).

Who can get an ASP account?

You can open an ASP account at Finnish banks if you are 15–44 years old. Married couples can open an ASP account together although one of them has already reached 45 years of age.
When finally taking the ASP loan you do not need to be under 45 years anymore. Another condition to fulfill is that you have never owned at least 50% of an apartment before.

What are the benefits of an ASP loan?

The bank pays a 1% interest on your savings every year. Once you buy a home with an ASP loan you receive an additional interest of 2-4% per year retrospectively. Additional interest can only be paid for the starting year and a maximum of 5 years though. Both annual and additional interests are tax-exempt.

The interest rate of the ASP loan on the other hand is lower compared to similar first home loans. Additionally there is a government subsidy against rising interest rates for the first 10 years of the loan period. The interest subsidy steps into place if interests rise above 3,8%. The government will then pay 70% of interests exceeding the 3,8% interest rate. However, please note interest subsidy is only applicable to a capped loan amount maximum based on municipality. F.ex in Helsinki the maximum loan covered by interest subsidy is currently 215 000 € (Vantaa and Espoo 160 000 €, Tampere and Turku 140 000, other 120 000 €). For two ASP loan applicants the interest subsidy can be up to 50% higher, f.ex. in Helsinki it can become 322 500 €.

The ASP system also permits you to easier comply with necessary loan securities. This because you can get a government security of up to 25% of the loan amount free of charge. The maximum government security you can get for an ASP loan raises to 60 000 € in 2023.
See the examples below. In order to buy home B for 300 000 € you would need to save 30 000 € in order to get the maximum government security for the ASP loan. For higher home prices the government security won’t suffice so you need more securities (home C).

How does it work?

You need to save into the ASP account for at least eight quarters (no need to be consequent quarters). Per saving quarter you have to contribute at least 150 € and no more than 4 500 €. The maximum amount used to be 3 000 € per quarter, but per April 1st 2023 the amount was raised to 4 500€. One cannot make one large payment into an ASP account and ask for the ASP loan in return. You can continue saving to the ASP account for as long as you like.

When you have saved at least 10% of the purchase price of your apartment, the bank may grant you an ASP loan. It is important to understand there is no guarantee to get an ASP loan, but chances are better because of the benefits mentioned above. You can take your ASP loan also from other banks than the one your ASP account is at. Banks will in any case make a separate decision on your loan eligibility. Consequently it can be a problem to get an ASP loan if you have no permanent residence permit.

Please note it is not possible to use an ASP loan to buy a right-of-occupancy home. Also you must move into the home purchased with an ASP loan, so it cannot be rented out. Read more about the ASP system in English here.