To ask you wise mumsnetters to help solve this

[constantlyseekinghappiness]

I’m throwing this out to all of you wise wise mumsnetters as we simply cannot work out the best way to proceed.

Relates to splitting of mortgage and bills

To help keep answers impartial I won’t say who is who and use the sometimes disliked person A and person B

Person A and Person B are buying their first property together. Have been together for a couple of years and are living together in rented flat.

Person A has the lower paying job of the two. However has significant savings meaning that Person A can afford to put down a 10% deposit and decorate and furnish new property. Having calculated this it will come to around 50% of their savings.

Person B has very little savings and won’t be contributing to deposit, lawyers fees, other mortgage related fees, and major furnishings for house. They will be buying smaller items (think small kitchen essentials and bedding etc). This won’t be a huge amount I’m the grand scheme of things.

Person B is the higher earner if the two - about £15,000 at the time house is purchased. Over the course of their careers Person B will always be the higher earner and the amount of this gap will increase over time.

Person A and B plans to have a joint account to pay for mortgage, all house related bills and food shopping. Other payments like mobile phone bills and car finance payments will be kept separate. Savings will also be kept separate but both will be paying into the joint account more than necessary each month so there will be extra in pot to pay for holidays and outings etc.

It has been decided that Person B will pay Person A £200 more each month. This is to pay back for the initial deposit etc paid out by Person A Which will be paid back over to me. This amount could increase as years progress.

Dear mumsnetters how would you work this?

Option 1 - person B pays £200 more than person A into pot. Eg if it is decided to pay in £2000 in total each month then person B will pay £1100 and person A £900.

Option 2 - both pay equal amount into pot (£1000 each) and person B pays Person A £200 per month directly to their personal account.

Or any other smarter options we haven’t thought of.

Sorry that this is so long, we can’t decide which would benefit A more.

When I got married my ex put far more into the house initially. Later into the marriage I was able to put a huge chunk into the house too.

When we split up we agreed to both take out the amounts we had put in and divide the rest. I'm not sure if that's what is usually done but both of us were happy with that.

During the marriage we just put the same amount in and it would have made me very uncomfortable to be "paying him back" some of his deposit because, it was supposed to have been a commitment (ie marriage/ mortgage). So in your position I would be expecting equal contributions to the pot. Or contributions based on earnings. I wouldn't want to get wound up about "who put this in/who owes the other this" at the start of everything.

Maybe just agree that if you ever split up, the person who put the deposit in would get that back, (or the percentage of what the deposit was worth when the house was bought back, if you want to be scrupulously fair!)

200 into personal savings account until half the deposit and furnishings money minus half their initial investment is paid. Then re evaluate. Or portion off the house as tenants in common rather than joint tenants to protect the initial outlay and stuff the 200.

I'm not saying that this is the right way but we just pooled everything really and, in the long term (over 20 years), it's probably evened out.

So, when we bought our first place it was based on my wages and I was paying the majority of the mortgage as DP was working on the house we bought and setting up his own business. Over time it evened out a bit and then, when we had children, DP was the main contributor to the family as I became a SAHM for a while. Now the children are older we're both contributing again but pooling it.

'This is to pay back for the initial deposit etc paid out by Person A Which will be paid back over to me*

So if you're going to 'out' yourself as person A, can we please use normal terms of me and him/she?

I assumed ‘to me’ was autocorrect for ‘time’

Person A needs to protect their initial contribution with a Trust Deed.

Buy as tenants in common to protect larger deposit. Deal with that as one issue

Furnishings and renovation - B pays A until both have spent same amount. You will both be using or enjoying whatever this money is spent on. It’s just that A has it now. It’s like loaning A half the money needed.

Bills- either equal or % of salary

I think option 2 is more straightforward, if person A wants to be compensated, but it really doesn't matter. Over time, everything tends to even out anyway. I contributed more to the deposit than dp did, but I had to take a slice out afterwards. I also earned/contributed more than he did, but when he inherited some money it all went on the house. If you're a committed couple, it's all academic.

Well, in your example, under the first option person A is paying £900 and person B is paying £1100, and the rest of their earnings is for personal spending money, whereas under option 2 it's effectively £800 and £1200. So surely option 2 benefits person A more? Am I missing something?

You have two options.

Keep your ownership separate and A owned 55% and B owns 45%

What A spends on deposit and large furnishings minus what B spends on small furnishings divided by 2. This figure is then effectively a loan from A to B andB should pay is back at £200 a month directly into A savings account until it is paid off (depending on how many years this would take you may or may not add interest).

In terms of paying proportion of the bills then I think it should be 50/50 but if that leaves A short on luxury money ie socialising together I would expect B to pick up the tab more for things like that but that could depend on what A spent their money on of course.

Personally there wasn't a disparity in savings when we moved in together (and we were just about to get married) so we went all in and a month before we got married decided on 1 joint account despite now DH earning a little more than me. This has worked for us over the years especially when children came along. Until recently DH always warned more than me and when I was part time significantly more than me but actually now I earn more than him but it has never been this is yours or more it's all ours.

‘To me’ is meant to be ‘time’

If savings and personal bills (phone, car, etc.) are being kept separate, it’s only household and shared (holiday and social) expenses being shared.
If the property is jointly and equally owned, Person B should pay the additional £200 directly into A’s savings and not into the shared account as A would only benefit from half of that whereas A has ‘lost’ considerable savings (regardless of what percentage they have left of savings) and B hasn’t paid anything towards the property and home furnishings so far.
As B earns more, they could be paying more than £200/m to repay the deposit savings loss quickly and get back on to an even footing sooner, but that’s up to you both to agree what’s fair and acceptable.
Another solution would be to get the solicitor to draw up a legal document stating that A receives whatever % A put as deposit of the the nett proceeds of the sale and the rest gets divided equally, that way A protects A’s savings and gets a fair return for leaving them in the joint house which should gain more in value than money in a savings account. This way would allow you both to start as you mean to go on, equally, yet protect A’s savings.
Regardless of commitment, without a legal arrangement or marriage, A’s savings put down as a deposit which B is benefitting from, should be protected at all costs. You should work out how many months it will take for A to have those savings repaid at only £200 which I suspect will be several years so it would be better to tie it in with the property so they are protected immediately.
Just as an example, in simple terms, if the property costs £250,000 and house deposit, other legal and furnishings cost come to £50,000, this is 20% of the value of the house, regardless of the amount of mortgage which will now be shared jointly. Assuming the house will not lose value, if/when it is sold, whatever the nett value is after paying off the mortgage and selling fees, 20% is awarded to A and the remaining 80% is shared equally between A and B.
I would not be happy if A did not have those considerable savings protected in the property rather than paid back on a monthly basis by B.

If you are planning for this to become long term with marriage and children I dont know why you are tying yourself in knots. So glad my dh didn't do this.

He put in all the deposit for our house and even took on some of my debt.

However, I made a list of both our incoming, how much we both had to pay out personally for phones, hair cuts, credit cards etc and how much needed for house Bill's.

We then paid in a percentage of our remaining after personal to cover household which would leave us with equal personal money for extras or savings.

We intend to stay together for our lives. I do more around the house to make up for my short fall and over time have paid for more decorating items etc

My dh married me for richer for poorer as did I with him. He knew my financial situation and was fine with it. I guess we kind of took those vows when we got into a relationship. Sickness and health, better or worse.

I have been in relationships where the bloke gets uppity cause I didn't earn enough to contribute as much as them and they never lasted and just got me into more debt as I took out loans and credit cards to make up the shortfall.

Option A doesn't work, it would have to be £800 and £1200

(I would put more of the savings towards a larger deposit. DIY, decorating etc can be done as you go along. Perhaps just keep back any money needed for immediate essentials such as re-wiring or new roof).

In this situation I think Person B should pay Person A back at £200 per month until the extra initial investment is matched. How you get the paperwork to protect you both I don't know.

I think you are A.

I probably would not buy a property with someone I wasn't married to.

I was probably quite naive, but DH moved in with me and then we were married when we bought our first place together. He was a student with virtually nothing and i had some savings plus profit from flat. I've always wanted more than him, as much as double. However we've always had a shared account and he's put in every penny he earns and spends very little. I was okay with the situation as we were colleagues before we got together and he had split up with the girl he was with and had bought a flat with and had left her with everything. We've been together nearly 25 years so it's irrelevant who put in what. Whilst I do understand the importance of protecting against split up, I always wonder if that affects the perceived permanence negativity. I'd go for option B if any.

The problem with 'just' protecting the initial extra investment is that you never get it back / benefit from it, if you stay together.

Could you delay purchasing the house until Person B can put in an equal deposit?

Ring fence the deposit as a charge on any sale of the property and keep it separate so it always belongs to A. Or alternatively whatever proportion of the property it represents. Easily achieved by buying as tenants in common.

Put both your paycheques into a joint account which will be used for all expenses. I don't understand all this tit for tat about finances? If you love each other surely you trust each other and don't need to play petty little games with finances like this.

I think you have to split everything equally. So option 2. But what happens if you split?

If you love each other surely you trust each other and don't need to play petty little games with finances like this.

Have you read Relationships??

Thank you for all of your replies.

I agree that we will probably go with option B - reading your comments I accept that option A doesn’t really work at all.

As @JaynePool said - We discussed just securing the deposit when we sign the mortgage papers but then concluded, as said, that should we stay together Person A really doesn’t get anything back from their huge input.

It’s not really an option to postpone buying until both are equal. That would take years. We have found a house and both happy to proceed with purchasing now.

The house will be 50/50 in both names.

Option B-work out the amount person A is putting in extra over the whole situation (deposit, big items, small items) and how many months this will take to repay at £200 per month.

If it goes into the pot it remains joint money and will end up with person A never withdrawing it to go back into their savings so you might as well just pay the same.

Good luck

Option 2
Keep it simple
person B is essentially repaying a loan