Buying an apartment
A first-time home buyer is exempt from the transfer tax
You are considered a first-time home buyer if you are between the ages of 18 and 39 and have not previously owned at least 50 % of an apartment. As a first-time home buyer, you are exempt from the transfer tax, which is the tax paid for transferring properties and securities. You are also entitled to a tax deduction on your mortgage interest. If you are about to buy an apartment, check the latest tax practices with the tax office. Buying an apartment is a good investment as in the long run, living in an owned apartment is more affordable than living in a rental apartment. Furthermore, your wealth will increase with mortgage repayments, and later, if you decide to sell the apartment, you will often make a sales profit as well. Give thought to what kind of an apartment you need and how much you could repay your mortgage every month. Remember: you must have enough money left for living as well! Your bank will assist you in making calculations. Contact your bank or fill in a mortgage application through the online service of your bank. It is good to have a loan pledge before you start seriously looking for an apartment or place an offer. The loan pledge will not bind you to anything.
What is a mortgage?
Banks grant loans called mortgages for buying an apartment. The loan period for a new mortgage is currently 20‒25 years. The grantor of the mortgage is paid interest for granting the mortgage. The costs of the mortgages vary from bank to bank, as the bank will add its own service fees, i.e. a margin, to the payable interest. The margin of the mortgage is the extra amount charged by the bank to make a profit on the loan. You should always compare the interest rates of loans and shop around between different banks. A fictional example of the interest of a loan: A bank grants you a mortgage with a 2.0 % Euribor interest rate and adds its own 0.5 % margin to it. In this case, for a € 100,000 mortgage, you will pay 2.5 % interest, i.e. € 2,500 a year. Of this, € 2,000 will go to a central bank (such as the Bank of Finland) and 0.5 %, i.e. € 500, to the bank that granted the mortgage.
What is an ASP account?
A housing savings reward account, i.e. an ASP account, is for people between the ages of 15 and 39 looking to save for an apartment of their own. You have to make deposits during at least eight calendar year quarters. The deposits paid into the account and their interest must amount to at least 10 % of the price of the apartment to be bought. The bank will pay 1 % interest into the ASP account for the entire duration of the saving process. Additionally, the bank will pay additional interest of 2‒4 % when the saver has reached his or her savings goal and purchased the apartment. The additional interest will be paid starting from the year of the first deposit and for up to five calendar years after that. The state will pay a 70 % interest subsidy for the ASP interest subsidy loan for the amount exceeding the 3.8 % excess interest. Always check the current maximum amount for an interest subsidy loan. If the saver withdraws assets from the account or purchases the apartment prematurely, the ASP agreement will be cancelled. If the ASP agreement is cancelled, the saver will have no right to the loan defined in the agreement. Ask an adviser at your bank about ASP saving.
- www.environment.fi > ASP saving
A right-of-occupancy apartment is one alternative to renting and owning an apartment. Right-of-occupancy housing means that you have the right to live in a specific apartment after you have paid a right-of-occupancy charge. The charge can be up to 15% of the price of the apartment. After that, you will pay a certain sum each month, i.e. a charge for use. You cannot buy a right-of-occupancy apartment entirely, but you can live in one for as long as you want. A person applying for a right-of-occupancy apartment will receive a reservation number from the municipality, after which he or she will report as an apartment seeker to the owner of the right-of-occupancy apartment. Choosing a tenant is based on reservation number order. You can get a state-subsidised right-of-occupancy apartment if:
- you are at least 18 years of age
- you do not own an apartment in the same area, with features equivalent to the right-of-occupancy apartment you are applying for
- you do not have the finances to purchase an apartment equivalent to the right-of-occupancy apartment you are applying for.
Some municipalities also provide right-of-occupancy apartments. Check what the situation is in your municipality. You can also search for apartments at the following: