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Government proposes three big changes to ease first-time buyers' purchases

First-time buyers are set to get a boost if this proposal goes through.

Millaiseen asuntoon raha riittää ja milloin? Ensiasunnon ostajien keski-ikä on Suomessa on lähes 30 vuotta. Asp-lainan saajien keski-ikä oli viime vuonna 27 vuotta. Image: Tiina Jutila / Yle

Finland could see more help for first-time buyers from next year, if the government's planned changes to the state-backed ASP housing loan system go through.

If the reform is passed into law, it will open up state-backed ASP housing loans (siirryt toiseen palveluun) to more people, and they will be able to borrow more money.

The changes went out for consultation on Friday.

The ASP loan system allows young people to open an account and save up for a deposit on their first home. They get a bonus on top of the interest paid on their savings, and those savings are tax-free.

Once they have saved up enough for a deposit, they can apply for special ASP housing loans that come with better terms and conditions and state-subsidised support if interest rates rise above 3.8 percent.

Proposal one: Raising the maximum age of ASP savers

At present anyone aged 18-39 can open an ASP savings account. The government wants to raise the maximum age to 44, opening the scheme to a broader range of people.

The under-40s do have certain other advantages when it comes to buying their first home, as they don't have to pay transfer tax (siirryt toiseen palveluun) on the purchase, so long as they meet certain conditions (siirryt toiseen palveluun).

That age limit will remain at 40.

Proposal Two: Raising the limit on maximum loan possible

At present the maximum loan possible under the scheme is the same regardless of whether a couple or an individual is buying the property.

The government now wants to raise the maximum value of homes purchased by couples under the scheme, in response to rising property prices. If the proposal goes through, couples in Helsinki will be able to buy a home worth up to 322,500 euros.

Property locationMaximum ASP loan, single personMaximum ASP loan, couple (proposal)
Helsinki215,000 euros322,500 euros
Espoo, Kauniainen, Vantaa160,000240,000
Tampere, Turku140,000210,000
Rest of Finland120,000180,000

Proposal Three: An extra 10,000 euros on the state loan guarantee

The proposal also suggests raising the maximum state-guarantee portion of housing loans by 10,000 euros to 60,000 euros. This part of the loan can cover a maximum of 25 percent of the property's value.

The idea of this guarantee is that together with the 10 percent deposit ASP savers are required to put up, it will be enough to cover the guarantees normally demanded by Finnish banks.

Finnish banks accept the property as a guarantee for only 70 percent of the loan.