How should we split living costs if partner moves in

[ladypete]

Hello MNers. I’m hoping you can help me sort this out in my head.

My partner is giving up their flat (not extending lease and using the option to terminate it early) due to both parties living there having reduced earnings due to Covid. We’d always discussed the option to move in with me if this happened (or just in general when their lease was up as things are going really well between us)

My question is how to split the bills?
Do we split everything in half? Mortgage and bills? This is what they seemed to think would happen in small talk and it works out as a big saving for both of us. They could fast track a way to their deposit (to buy alone, we want individual investments before we think of buying together) and I could start to comfortably overpay my mortgage.

Do I pay mortgage and they contribute to some other bills? Obviously this wouldn’t be an even split but perhaps it shouldn’t be as I own the flat? Is it normal to pay towards someone else mortgage as a partner?

Do I get them to sign a lease agreement as a lodger? Does that even work seeing as we’d be sharing a room (1 bed flat)

I want to put at least one bill in their name so that they have proof of address for ID purposes should it ever be needed etc etc.

The only cost that would drastically change would be ending my single person discount on Council Tax.

Any ideas or experiences would be much appreciated, as well as anything I may have missed!

YABU - just split it equally - they pay a set amount into your bank account and move one bill into their name
YANBU - find another option to make it fairer to both parties as you own the flat (if splitting equally is unfair!)

Well if you want him to claim a financial interest in your home if the relationship breaks down by all means let him contribute to the mortgage!!!! I really don't know why people continue to be so naive when it comes to this?? Motto should always be hope for the best plan for the worst

Therefore have a co habitation agreement clearly stating what his financial contributions are for - avoid any contribution to the mortgage unless you want to see him waltz off into the Sunset with the keys 🤷‍♀️ .

I don’t think he should be paying half the capital part of the mortgage. Half bills yes. Half the interest part of the mortgage yes. But half the repayment part of your mortgage just means he’s paying off your debt.

I think he should pay half the bills as a minimum...

Whether you want him to pay half your mortgage costs (but not half the mortgage) depends on how much of the "saving" you're making you want to pass onto him.

I would say you can charge him mortgage costs up to "market" rent...i.e. what he would have to pay for a similar room. Not beyond that. But as that may not be much of a saving for him, you may choose to charge a smaller amount (say 1/3 mortgage costs) to reflect the fact he's essentially helping to pay off your mortgage. It really depends on the nature of your relationship.

Have you been together years and years or 18 months? Have you been in holidays together and spent weeks in end together? Only asking because I'd personally feel differently about how to do this in a five year tried and tested relationship than one of under two years, depending also on whether you essentially spend most nichts together already or are used to your own space. Potential for it all going wrong within a year is high if this is the first time you've shared smallish accommodation for an extended period etc. A one bed will be either cozy or stifling....

I owned when DH and I first moved in together in a relationship which was then under a year old. Pragmatic choice as he was moving long distance.

I rented my flat out and we rented a two bed house together.

In all honesty I think this is best as it's the lowest risk to both parties and avoids the inequality of moving into someone else's home. It allows you to be equals. An unequal power balance isn't how I'd recommend starting the next phase of a relationship.

Minimumstandard the problem with romantically involved couple sharing the one bed flat belonging to one partner is he's the non owner isn't getting a room, Just a couple of drawers and a space in the owner's bed.

That's why I don't think it's usually a good idea - you can't formally rent a room out in a one bed. It can never be fair, equal or low risk. Better start in an equal footing by renting out the one bed flat and somewhere new together with an equal split.

@Minimumstandard To be honest, doing that would put him in the worse position as my full mortgage is cheaper than anything (probably including a room) you could rent around here to be honest.

My full mortgage plus bills < his current room plus bills.

@UntilYourNextHairBrainedScheme I completely get that! It’s been under 2 years, but we spend most nights together and spent a significant period of lockdown isolating together due to work (long story but it worked out just fine and made us realise how easily we do live together, hence them ending their lease has made this very much more of a long term reality). I do know that it’s still a new relationship though and that things could still go wrong. We just wouldn’t be spending day after day in each other’s pockets for the first time so that won’t be a shock to the system as such.

Ps hope I’m not drip feeding too much - just want to answer posters Qs as it helps them to give advice!

I would say you can charge him mortgage costs up to "market" rent...i.e. what he would have to pay for a similar room.

What’s market rent for sharing a bed with your landlord and having no tenancy agreement though?

Personally I wouldn’t charge rent to a partner nor would I expect them to pay down my debts and increase my assets for me.

I would share joint bills (excluding mortgage) proportionately to income and then he can save to buy his own property. That seems fair as then you’ll both have the same level of housing security and there won’t be such a power imbalance.

Or if he does pay half your mortgage for you, will you then pay half of his when he buys his place (which would take longer as he’d be paying into your asset) or would he have to keep paying half of yours and all of his?

It wouldn’t sit right with me to have someone paying into an asset that is only in my name.

Not sitting right with me is when a couple move in together and one of them gets a great financial advantage and the other hardly any.

OP said they would both gain if he pays half of everything. So it seems equitable, fair, reasonable to me.

That way they can both save for the future, no matter what happens to their relationship. The way most posters seem to favour means he gets to live very cheaply, build a savings pot that he could just walk away with, and OP gets a warm bed!

Not at all equitable!

I see it as OP would be getting the financial advantage of someone paying her mortgage down for her and she has security in her housing situation whereas he could be kicked out at any time the OP decided.

That way doesn’t seem equitable either.

If they pay half each of everything except mortgage, OP gains by half of her other bills being paid, doesn’t lose anything partner also gains and can then work to get a foot on the property ladder, but loses security of housing (until he can actually buy)

It’s definitely tricky when one person owns and the other doesn’t. Both renting is much easier as both names can go on the tenancy so are equal in terms of housing security and they can pay half of the rent each so equal outlay.

Good for you that you are proactively looking into this now before he moves in. Personally, I would charge 50% of the rental cost of a 1 bedroom flat in your area plus an equal split of bills. This to me seems fair. I would suggest either visiting a solicitor to have an agreement drawn up or download a tenancy agreement for him to sign and have it independently witnessed.

Good luck moving in together, by openly sorting out money in advance it certainly sounds like you both have a healthy outlook and future together.

She she gets about £150 a month benefit and he gets what, £7-800 a month?

Forget the mortgage benefit... He is being housed and his rent pays off someone's mortgage. That OP is his girlfriend is irrelevant in the short term.

If the medium term goals are he also buys a property, more quickly because living with OP is cheaper than renting alone, he still gets that benefit if their relationship fails.

OP is as entitled to an equal financial benefit, when there is a benefit to be had. And both will benefit long term if they marry!

All the focus on her having a mortgage is just a distraction... They need an equitable agreement or their relationship will fail.

If he is currently renting then he will be paying someone else’s mortgage, why should it be any different if he lives with you? As long he can still manage financially then it’s all good

The reason he shouldn't pay towards the mortgage, is that he can claim a "beneficial interest" in the property, should you split up.

I think you should both go to see a solicitor, and have a cohabitation agreement drawn up.