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Original poster

Not to contribute to mortgage?

150 replies

StopItAndTidyUpNow · 04/09/2018 10:44

My sister has been with her boyfriend for about 4 years, they live separately, he has one DC from a previous marriage..

They want to buy their own place together but in order to do that she is going to sell hers, move in with him into his house and then once a suitable house comes on the market they will only have one house to sell rather than 2.
They agreed to sell hers because his DC is settled in the house and it wouldn't be fair to move him once to hers, then again to another place, plus his DC can walk to school from where he lives now and can't from my sisters place.

Anyway, we were talking about it on the weekend and she plans to move in but not to contribute to the mortgage by paying rent, the reason being is that all her disposable income will go straight into savings and be used to put into the new house. She doesn't want to contribute to the mortgage because she won't be named on it so if anything were to happen to her DP she would need to leave and ultimately she has reduced someone else's debt with no benefit to her. Similarly if they were to split up she will have reduced her DP's mortgage debt and be entitled to nothing.

Her and her DP have spoken about this and whilst he agrees that this is the most sensible thing to do he keeps giving her the occasional dig, i don't think hes serious, but a lot of serious things are said in jest! saying things like "well you could swan off after a year of free rent with your savings" - obviously she wouldn't do this, unless the relationship broke down but she's concerned that it will start to become an issue the longer she is there.

She has asked me if its the right thing to do and I am biased because she's my sister and because this happened to me - I moved in with an ex, paid rent which reduced his mortgage so that when we bought our next house we would have had more of a deposit, but the relationship broke down and he ended up with approximately 20k reduced off his mortgage just from my contribution and I walked away with nothing.

So has anyone been in this situation? What did you do?

OP posts:
Firesuit · 04/09/2018 11:22

The 'rent' is being put to one side to be used towards the new home.

At which point, it will be counted as a contribution from her, maybe giving her a bigger share of equity in the house, assuming they are still keeping score at that point. So she comes out ahead by the amount of free accommodation she has had.

But, given she's taking the risk of giving up her house in advance, I don't think it's unreasonable for her to live rent-free for a short time, as long as he agrees. I just don't think it should be denied that she's benefiting.

sunshinesupermum · 04/09/2018 11:22

If she doesn't want to rent her house then she does have to protect the money she gets from selling it until they buy a property together in case they ever break up.

My ex moved into my flat when we got engaged. He didn't pay me rent or anything towards the mortgage just contributed to the bills until we sold the flat and bought a house together 10 months later.

Notquitegrownup2 · 04/09/2018 11:24

Ah, I see mrsm - paying some rent into a joint savings account for them both to use to buy the new house, is a good compromise.

It seemed that posters above were suggesting that she should transfer the equity of her house into a joint account, which of course would be utter madness!!

Original poster
StopItAndTidyUpNow · 04/09/2018 11:25

I actually suggested she rented it out too, but she said she's looked into it and it sounds more hassle than its worth.

I don't know all of the ins and outs but I do know she was seriously looking into it and contacted a few agencies but ultimately decided it wasn't for her.
I think it was that her mortgage company wouldn't allow it, or would have made her switch to a new deal which she couldn't afford, and some alterations to the house had to be made for renting it out, but whatever it was it just wasn't feasible so that got ruled out.

OP posts:
Plexie · 04/09/2018 11:25

I'm with your sister on this one.

If the DP is so keen for her to contribute to the mortgage then he should add her to the mortgage and house ownership.

She's actually putting herself in a vulnerable position by selling her house, because if they split up and house prices have risen, she might find it difficult to get back on the property ladder at the same level (or even at all, which is what happened to a friend of mine).

The DP wouldn't be any worse off if they split up, so he's not losing out financially and would be secure in his own home. She, on the other hand, is at risk of being made homeless and probably having to find somewhere to rent before being able to buy again (with all the cost and hassle that entails).

If it's only for a year then I think it would be fine. I would be concerned it might drag on longer (what if the 'right' house doesn't come up, or he drags his heels with more reasons not to sell his house?) and then his resentment of her not paying towards the mortgage will increase.

If they really think their relationship is going to be long-term then they should formally pool their finances sooner rather than later. And probably get married.

YearOfYouRemember · 04/09/2018 11:31

Purely on the fact he's saying all these awful digs makes me think they shouldn't do it.

Before we were engaged dh moved in to my float and gave me £40 a week plus paid for the odd shop, meal out, treats etc. Then he bought a house that he could afford alone. Other issues came in but I didn't go on the paper work until we were married. Not DH's choice. I used the money I made on my flat to pay for the new kitchen at the house, a car once I was pregnant then the new kitchen in our next new house.

If we split, I've been a sahm mum for 17 years, married for nineteen, I assume I'd get at least half the cost of the house even though I didn't pay into this one, but did the previous.

There's a lot to think about. What feels too much of a risk and what's a leap of faith.

BarbieBrightSide · 04/09/2018 11:34

Your sister should probably get proper legal advice on this. I was in a LTR and he bought a house that we moved into together. I didn't want to go on the mortgage at the time, but I put the equivalent amount into a joint account that was used for bills, food etc.

We split up and he continued to live in the house for a few years. When he sold he gloated about how much profit he had made on it. In hindsight, if I had been on the mortgage the house would have been sold sooner and I would have had some of the equity. He certainly benefited from me living there as his day to day living costs were nil.

Original poster
StopItAndTidyUpNow · 04/09/2018 11:40

Barbie Yes that's basically what happened to me! The house prices shot up where we lived a few months after I moved out so not only did he have 20k from my contribution but also a large amount of equity aswell whereas I ended up without a penny and had to rent for years in a crappy area before I could save up enough for a deposit :-(

OP posts:
SchadenfreudePersonified · 04/09/2018 11:42

If she's not named on the mortgage, she's right not to contribute towards it - but obviously should contribute to other living expenses. Whether she pays rent (which is slightly different) is between the two of them. Her BF will benefit from the savings in the future.

PolkerrisBeach · 04/09/2018 11:44

How long is it likely to be for? If she's selling her house and then he's selling his within a year, I wouldn't think it's worth it. If we're talking years rather than months, she needs to think more seriously about it.

Cutietips · 04/09/2018 11:44

What would concern me is that they don’t seem to have sat down and had a grown up conversation about how they can arrange their finances so that both parties feel happy about it. When he makes passive aggressive digs, why doesn’t she just say, well you don’t seem happy about it, let’s have a proper discussion. The things we need to take into account are:

I’m risking my capital by selling now in case property prices increase and we don’t end up buying because we split.

You are benefiting from me paying half the bills while I’m living with you, which should allow you to save some money,

Your capital appreciation is being protected because you haven’t sold your property,

If we work out we will both benefit from the additional deposit we have been able to save by pooling our resources and only having one lot of household expenses.

If they still can’t reach an agreement after having this discussion, it may not be the right decision to proceed at all.

Original poster
StopItAndTidyUpNow · 04/09/2018 11:45

She will be contributing to bills, she has to contribute to council tax anyway as that will obviously increase when she moves in.

OP posts:
Mugglemom · 04/09/2018 11:45

I don't think it's fair for her to live there rent free, tbh.

Renting her place is the best option, even if she doesn't want the hassle. It's obviously short term anyway.

Otherwise, I'd say I agree to open a joint account and pay into that.

eggsandwich · 04/09/2018 11:51

Absolutely tell her to not put the savings in joint names as if they split he will not only have a home but half of her savings.

Is she paying for the food or contributing to any bills, that way shes helping out financially so her dp is not subsidising her and shes not going to walk away with nothing by having him on her savings account should they split.

I would say once they have then brought a property in joint names then yes make her savings account joint but not until then.

Tessellated · 04/09/2018 11:53

At which point, it will be counted as a contribution from her, maybe giving her a bigger share of equity in the house, assuming they are still keeping score at that point. So she comes out ahead by the amount of free accommodation she has had.

She won't come out ahead though, as he will have another year of mortgage payments worth of equity from his house when he sells it! Whereas she is giving up that (and the potential for further value increases) by selling at the start of the year. Mortgage payments don't disappear into the ether, they build up equity in an asset. If he was renting I would think differently.

poppyseeeds · 04/09/2018 11:53

The thing is, his mortgage payment isn't all towards equity in the house, loads of it will be interest. I have previously worked it out as paying half of the interest per month in someone else's mortgaged property, that always seemed fair to me.

VanGoghsDog · 04/09/2018 12:00

Well, the obvious answer is that she gives him half the saved money (from her not paying her mortgage) as 'rent' with no expectation that she has any interest in the property, and saves the rest in her name only.

He then uses all equity for new house (assuming he's used her money to overpay his mortgage, or uses the money she gave him which he has saved) and she throws in her released equity and savings and they are even. If they break up before this, they are even.

If he dies - well, she moves out and gets somewhere else to live, but at least she has her equity and savings and has had reduced rent.

honeybeetheoneandonly · 04/09/2018 12:03

I can think of many solutions to this issue.
They could open a joint account when they live together; put a percentage of their salaries in to use for all bills and shopping and she could add an extra amount (eg £150) as a token.
In any case, they need to have a discussion on what would be acceptable to both of them.
On another note, if he lives within walking distance to school I cannot imagine him wanting to move any further away (at least not while his DC is going to that school).

Bibidy · 04/09/2018 12:06

Sorry OP, I never agree with threads like this.

The way I see it is that anyone living in the house should contribute to the cost of living in the house. Even though your sister won't gain anything from the equity if they split up, she'd still be far better off as contributing towards his mortgage is probably less than she was paying for her own mortgage, plus she'll have a load of savings.

I would feel completely uncomfortable to live in my partner's house for free while he paid for it.

Shampooeeee · 04/09/2018 12:07

I’m with your sister.

If they split up, she will have sold her home for no reason and will have to go through the hassle and expense of buying again. She is the one taking all the risks in the relationship and she is compromising to make life easier for him and his DC.

If her OH can’t see that side of it, I would assume he is a bit simple (or selfish).

TwoOddSocks · 04/09/2018 12:08

I would probably contribute some amount in that situation maybe half of the interest on the mortgage. That could go into his savings account and still go towards their new house.

worridmum · 04/09/2018 12:11

But if a man moved into a womans house but refused to pay "rent" he would be called a cock lodger.

She cannot simply move into his house for 1 year rent free maybe if she does not want to pay rent maybe she foots all the food + bills because otherwise

She is being a female cock lodger because 50% of food, energy council tax is bloody nothing lets be optomistic and say there are all expesive she would be paying £300 a month.

And saving her self £1000 a month on rent / morgatge payments so she comes out ahead while he remains the same or actually in a worse postion because more people = more wear and tear because all she is doing is covering her extra costs but still pocketing massively.

It is unfair she needs to pay him rent.

Emma765 · 04/09/2018 12:15

No solution is ideal for them both. If they're both more interested in 100% iron clad protecting their own interests then they're not going to get anywhere and I'd be reconsidering the relationship.

Username198 · 04/09/2018 12:16

Surely the money she saves by living rent free isn't really a saving as had she not sold her house this money would have reduced her mortgage (increasing the equity) so the effect on her net assets is nil. Appreciate interest plays a part but given that she is sacrificing any capital appreciation and security I'd rather be in his position than hers.

BlackrockMum · 04/09/2018 12:21

it seems more equitable that she doesn't pay him rent, as assuming as you've said they are splitting all bills, he would still be paying his mortgage for him and his DC anyway, so should they split he isn't any worse off , equally your sister is potentially earning interest on the profits from sale of her house that might go some way towards keeping her side balanced against the increased equity had she held onto house, but as he might feel there are concerns (who knows who's whispering in his ear why would you just have her move in rent free) so I'd suggest she says to him I'm going to open an account and every month I'm going to put some money in from what id save on rent, and when we find a place to buy it will go towards the solicitors fees, and buying new furniture and doing place up, and even if any left over we can put some into your place do it up for selling purposes so we are both winners, I don't expect you to contribute to this while your still paying mortgage, if we split up ill probably have to use that as deposit on a new place