increasing mortgage to repay parents

[Jadefeather7]

So when we bought our place my parents kindly helped us out with our deposit so we could get on the property ladder. It was made out to be a gift at the time but has now turned into a loan (which I am fine with as it is their money at the end of the day)

My mother is a serial “worrier” and has been her whole life because she had an insecure childhood. She’s always worried about the family financial situation and had never really spent very much. My dad (who is an accountant by the way) thinks they are fine financially but she disagrees.

In any case we always wanted to try to repay them, and now that we have decent incomes we suggested doing monthly instalments however whenever we mentioned it to her she would say “Not now- I will let you know if/when I need it” I assume she’s also thinking about inheritance tax etc as she’s mentioned before to my brother about wanting to set up trusts etc. DH and I are getting a bit fed up off her constant digs about money whenever we mention going away on a holiday or doing something nice for ourselves. She talks about her fears of being homeless and not being able to eat which is honestly ridiculous as she knows that as long as her kids are around that could never happen. We would rather not eat ourselves than see our mother going hungry. But anyway we want to end these conversations and do a lump sum payment to her so she has peace of mind that the money is in her bank account.

We have good incomes so we can look to increase our mortgage. Have discussed with a bank and pulling out the amount we want to repay would increase our mortgage by £600 which we can afford. Obviously hoping that there aren’t massive changes to interest rates. Is there anything else we should be aware off or think off before we go down this route? I’m a little nervous as I’m still fairly young and not massively financial savvy! Thanks

How long would it take you to save the money if you put the instalments you were going to pay into a separate bank account?

@slashlover I think it will take at least ten years to repay the full amount if we were to stay on current salaries and expenses

I wouldn't repay them, you can't give someone a gift, then move the goalposts after the fact and say it was a loan instead.

It was made out to be a gift at the time but has now turned into a loan (which I am fine with as it is their money at the end of the day)

There was a thread about a similar issue r century, except in that case it was the parent asking for the money back so they could buy a second home, and it would have forced the adult child to sell and move back into rented accommodation - so, different financial dynamics to yours.

However, when parents (or anyone) give money for a deposit, they have to sign paperwork to say 1) it is a gift, not a loan; 2) they have o financial interest in the property. These are conditions imposed by the mortgage lender.

So the question is - did your parents sign such paperwork? If they did, they can’t now claim it was a loan. Any sort of informal nod nod wink wink we’ll say it’s a gift but it isn’t really could be construed at an attempt to play the taxation system.

You are of course at liberty to give them a gift if you want to and can afford to. You can do it now. Or you can tell them that money will be there when they need it. It sounds like you would prefer to do the first, to get out of a sense of obligation - but if they genuinely gave you a gift, there should be no obligation.

Why don't you pay them a portion of it and see if that's enough to stop the little comments. I suspect that when you actually go to refund it, it will become a gift again.

You'll be paying interest on that increase for the lifetime of your mortgage.

I wouldn't. I don't think you should increase your mortgage for anything that doesn't increase the value of the property (or really desperate situations, which this isn't).

Either start paying her back now or start a separate savings account (with a notice period) and pay into that instead. Make a written agreement between yourselves (in case of problems down the line) that that's what the money in the savings account is for.

Note to anyone else: if someone gifts you money, get it in writing that it's a gift!

@kazplus2 I agree because every time I suggest trying to set up the repayment instalments she stops me but I’m really fed up of the comments and just want to move on from this now.

@DisplayPurposesOnly That was my original plan and what I kept suggesting to her. I could just go ahead with it but part of me just feels like doing the lump sum and getting it over and done with and her having a nice bank balance to look at would be better for her but maybe not good for us.

I would extend the mortgage and get it over with and to your dad so she doesn't get all funny about it.

If she carries on worrying and digging at you tell her you've just given her X amount and to spend it wisely.

She sounds difficult tbh, I would struggle with that level of drama queening.

Have you spoken to your dad about this?

The gift must have been significant if it will increase your mortgage by 600 per month.

I assume your parents are quite financially comfortable if your dad is an accountant and they could afford to give you this money in the first place.

There are two thing here, the gift was from both of them - do they both agree they no longer want it to be a gift and want it to be repaid?

Secondly, does your mum honestly think she will be homeless and starving, or is she being manipulative. If she honestly believes this, despite being financially secure then she may have some mental health issues (anxiety) that require some professional treatment.

It is shitty to gove a large cash gift, then make the recipient feel guilty. Your mum is being completely unreasonable. But you need to establish why.

Please don't remortgage it is such a waste of money. Set up a DD to go into an isa. Just ignore the digs.
When you have saved enough to repay her, give her a cheque.

@dollymixture22 My dad disagrees with her but she is a more dominant person. He keeps saying they are fine and that she needs to calm down but she doesn’t listen to him.

She does have some depression and anxiety type issues as she had a very difficult childhood. She doesn’t believe she has any problems and won’t get help.

If you give them a lump sum or monthly payments there's a chance that might affect benefits they may be eligible for at some point.

I'd find out if there was a way to set up a savings account attached to your mortgage, the balance of which would offset against the total owed to the bank thus decreasing the interest you need to pay. That way you have "set aside" an amount to repay the so called gift while making it easier for you to clear the mortgage faster.

@smudgebutt thanks, will look into that. What sort of benefits do you mean?

Personally I would not do this. The way you describe your mother it sounds like she is more worried about ending up on the street or in financial dire straits, perhaps particularly if she outsurvives your DF. Maybe there is a way that you can assure her you will always ensure she has a roof over her head and she doesn't have to worry while not giving yourself an immediate financial impediment.

One way you could do this might be to spend the money extending your property so there is always an emergency option of having her move in with you one day if necessary. Maybe that would make her feel better

Have you actually spoken to your mum and dad together about this? If you haven’t I suggest you do, and lay it out like this:

• you can pay this money back in instalments
• you can add to your mortgage and give it back in full
• you can not pay it back.

They need to choose one option but the guilt tripping HAS to stop. It’s unfair to give money and then constantly snipe about it whilst also refusing to accept the money back. I think you need to use a bit of guilt tripping yourself and tell them how much it upsets you to hear the things your mum says when they are clearly untrue.

(Apols if I have the wrong end of the stick!)

FIL was the same with the money they indefinitely lent dh

Thought it gave him a say in our house and finances

We increased our mortgage and paid him off

Get a receipt though (only slightly joking) not only does FIL not remember being paid back he has also told another family member that we haven’t paid him back...i think he lent the family member the same amount and has kindly written it off

@busybarbara Unfortunately our place can’t be extended. She lives in a large four bedroom house worth over half a million which has no mortgage. She says it’s not possible to live on the state pension (they don’t have a private pension). They do have another property and also inheritance from her mother. With all of that plus the money we would have repaid on a monthly basis she would be fine and she agrees but still brings this up over and over again like she needs constant reassurance. It’s exhausting. I want to enjoy my time with my family not listen to these dramatic visions of a bleak future over and over again.

She'll still worry even if you give them a lump sum. Anxiety can always concoct a new reason to worry.
Personally I would start paying into a savings account of some sort and every time she starts, just say you will have money put by to help.

Yeah writing this all out I’m beginning to realise that it seems to be about needing constant reassurance rather than the money itself. Will the lump sum or monthly instalments help her anxiety? I really don’t know

I have experienced anxiety, and have a friend who experienced an extreme anxiety spiral. Your mum is not being reasonable and, as others have said, giving her this money will not make her better.

It’s a shame she won’t have therapy. I was given coping mechanisms which really helped. One of the rules is not to rely on others for constant reassurance - it makes it worse.

@ElizaPancakes Her response when given options is always “help me out if and when I need it” which I’ve always said to her I will do. She can’t help bringing it up over and over again though. I guess she needs constant reassurance.

Don’t remortgage. Absolutely not. Talk to your dad and ask for bank details then pay back what you can afford monthly.

If not, when your mum moans about money say “mother, I’ve offered to repay you and you keep refusing to talk about it. If you won’t let us help can you stop bringing it up?”

Have you spoken to your dad? I think a discussion with both of your parents might be in order. If they gave it as a gift, and signed paperwork to that effect, I am not sure that they claim it was a loan.
It sounds to me as if she is letting her worries overwhelm her. I can understand, my parents lived hand to mouth and my mother worried about money constantly. It has affected me as I worry about being poor in retirement, even though I know rationally that we are comfortably off.