Benefits and drawbacks of an ASP loan

I opened my ASP account with OP in October 2018 when I decided that it was finally time to start saving systematically for my first home. However, I was surprised to learn when I was looking for my first home in spring 2020 that you have to save in an ASP account for at least eight quarters before you can get an ASP loan with benefits from the bank.

Fortunately, the bank’s customer service representative mentioned this ASP account minimum savings period during the loan negotiation, so I decided to continue saving in the ASP account for a few more months to take full advantage of the ASP loan when I bought my first home.

When I was competing for a mortgage loan, my own bank suggested that I choose a standard mortgage loan instead of an ASP loan, but I didn’t want to give up the benefits of an ASP loan. I ended up switching banks and at the same time transferring my ASP account and taking out an ASP loan and an ASP top-up loan from another bank that offered me the cheapest loans. It is always a good idea to compete for a loan by asking for a quote from a few different banks.

The ASP is a scheme based on the Housing Savings Premium Act, through which the Finnish government supports first-time homebuyers aged 15-39. The State Treasury advises banks on the application of the ASP regulations. You can open an ASP account with a bank between the ages of 15 and 39 if you have not previously owned 50% or more of any home. After saving in an ASP account for at least eight quarters and 10% of the purchase price of the home, the bank can grant an ASP loan and, if necessary, an ASP top-up loan.

The benefits of an ASP subsidised loan:

  • 1% tax-free interest and 4% extra interest on savings
  • Lower interest rate than other similar first home loans from the bank
  • State interest subsidy for ten years
  • Free State guarantee

The disadvantages of the ASP subsidy loan:

  • The maximum amount of the ASP subsidy loan is determined by the municipality where the dwelling is located and the loan ceilings have remained too low, especially in the capital region, where house prices continue to rise as demand exceeds supply, especially for small dwellings, especially for single-family houses.
  • A dwelling purchased with an ASP loan can be rented for a maximum of two years during the interest subsidy payment period only for a special reason, such as a place of work or study abroad or outside the area where you work, or to perform military service, with the permission of the State Treasury.

(The author is a member of the OUN community)

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One report

There are quite a lot of different documents involved in a housing transaction, ranging from a sales brochure to a floor plan to an audit report. All are necessary for the evaluation, but it is still possible to summarise the essentials in plain language in a single report. Good riddance to the legalese and welcome the core facts with one (1) single report!

Trade documents

Even if the deed of sale of a residential property is a free-form deed, it should still contain all the essential information. We will check that this is the case. We will also check all the annexes that go on the side of the deed, i.e. the entire bundle of documents. You can then breathe a little easier as you sign the deed to your new home.

Negotiated bidding

We are here to help you negotiate your offer. We tell you what to look out for, what to ask the seller/agent and how to interpret the answers. And what conclusions can be drawn from the situation

Making a takeover bid

There is more to a takeover bid than just the price offered. We will help you to identify critical issues and check that all the agreed issues are properly recorded in the offer. And only the agreed things. So that you can sign it with confidence.

Sales price

And by that we mean the final price. We also take into account any company debt and the plot share. We compare the price to other comparable realised transaction prices in the area, not to asking prices. Apartments are always individual, and their equipment and condition vary greatly. However, we will find out if the price area is reasonable and acceptable.

Level of care

We estimate the level of the management fee charged by the company compared to other comparable housing companies in the area. We also look at whether the level has been right for the costs and whether there are clear upward pressures.

Zoning of the area

We’ll find out if there are any zoning changes afoot, or if that sea view you bought at great cost is about to disappear behind a new tower block in a year’s time. Or whether there are some less radical things happening around the place you are considering.

Management of the housing company

We look at how the management of the company has performed, including both the management and the board. Has the management been concerned only with making savings at every point or with keeping the company in good shape and maintaining or even increasing its value? 

Future renovation projects

We assess what kind of renovation projects are expected in the near future and the timeframe in which they can be expected to take place.  We might also throw in some guesses as to the expected costs!

Repair history

We look at when and what measures have been taken in the company and mirror them against the technical lifetime of each item. For example, we use the definitions of the Finnish Building Information Foundation RTS and the Central Association of Plumbing and Heating. This allows us to estimate whether the company has a repair debt.

Housing company finances

We carefully read through the company’s balance sheet and annual report, calculate the company’s indebtedness, liquidity and assess the overall financial situation. We compile our findings into a plain-language report that gives you an overview of the company’s situation.