DPs house and shared finances

[TheFatDuck]

I need some advice on what to do about my DP’s mortgage and how we share our finances.

DP and I have been together around 5 years. We have plans to marry and have DC etc.

Before we got together, DP bought a house with a sizeable deposit. When I moved in around 4 years ago, I was earning significantly less than DP. At that time, it was decided that we would pay equal proportions from our respective salaries to cover the mortgage and bills. It was decided DP would remain on the mortgage and I would not be added. As my proportion was so minimal, I was happy with this.

At that time, I said to DP that should I start paying significantly more towards the mortgage (say 50% plus if my salary were to increase) I would want something to show for it if we were to split up. I was concerned that should I pay 50% of the mortgage for a substantial period and we were to break up, I would have nothing to show for the money I put in and that I would essentially be paying off DPs mortgage. This did not go down well with DP at the time.

DP and I are now earning near enough identical salaries and I am wondering what is now fair in terms of finances and what we pay. I am of course happy to split bills 50:50 but would be uncomfortable splitting the mortgage 50:50 as I would not want us to break up and for me to end up with nothing.

I proposed that DPs deposit and mortgage contributions up to now could be ‘ring fenced’ some how with the remainder of the mortgage being split between us with me being put on the mortgage (although I am not sure how this would work in practice). DP thinks that I shouldn’t get the benefit of this however as I did not put in any money for a deposit in the first place so does not want to do this. I think DP thinks I am being a bit grabby. Am I?

Am I being unreasonable in wanting some sort of protection for myself? What is the fairest thing to do here for both parties?

Ultimately I am happy to pay some sort of ‘rent’ to DP if it is nominal but don’t want to pay a huge chunk (which DP would put towards the mortgage) if I end up with nothing if we break up.

Has anyone been in a similar situation and can offer any advice?

Thank you

essentially he’s renting it from his lender

He's made a property investment which ought to increase in value, using a fixed loan which will not increase as the property's value rises.

I’m with your DP I’m afraid. Even if you ring fenced his deposit and contributions, if you were added to the mortgage and began to accumulate interest in the property then split up say, three years down the line, he could end up having to buy you out of your share despite the fact you didn’t initially put anything in. I wouldn’t want an unmarried partner of mine to benefit from me owning my property either. What I would do if I was the property owner is pay the entirety of the mortgage myself, and split all other expenses with the partner.

This would/should change if you have kids - then it is reasonable to expect the property to be split if you break up, because the children need to be housed.

@Cocomarine He did tell her that, but that was at the very start of their relationship and now marriage has been mentioned.
I think she just needs to get financial advice and talk to him again tbh.

Why do all (or most of) the posts assume OP is a woman and DP a man? OP won't necessarily have any maternity leave.

@Ellpellwood

Why do all (or most of) the posts assume OP is a woman and DP a man? OP won't necessarily have any maternity leave.

Fair point - I’m usually careful not to assume. Whatever the genders I agree with the partner as explained above

I think you need to buy your own place, or save up and buy a new property together or invest substantially in your own assets - stocks and shares ISA or pension overpayments. He doesn't sound very caring if he can't see that you're in a precarious position - helping him to maintain his asset with nothing in return?

Whatever you do, dont have children with him unless you get married.

Coco I'm not sure he'd be losing because the OP would be saving him some money on the mortgage repayments. I do think it's fine for cohabiting couples to not combine assets but to me marriage is about fully sharing lives and being totally 'in', not resenting the person you are supposed to love more than anyone else getting a potential gain.

Alsohuman it's rude to criticise someone's choice of word in their own post. You do you.
To address your point though, renting from a landlord is different imo, since both parties are equal in that transaction - neither is acquiring an asset.

You need to ring fence the equity he currently has in the house - not the amount he's put in, as that will be substantially less than what the contributions are now worth. Then looks at splitting the rest.
I agree with your DP - if you just what you propose and you then split up tomorrow, you'll have effectively gained a huge amount of money for doing precisely nothing.

Or you do what DH and I did - sell the house, and buy one together making equal contributions (or ring fence his deposit if it's substantially more).

@MrsHuntGeneNotJeremyObviously he would be lose money if the mortgage was his best investment. Made up figures:

He puts £1000 in, and expects 20% growth = £1200.

He puts £500 in and gets £500 cash (back from her paying half). He invests that £500, but the best net return outside of his domestic property is 10%. Total = £1150

For many people, the house they live in is the best investment they’ll ever make.

Plus - they’re not married, so that’s a moot point.

(@Ellpellwood I’m using he/she for clarity as I find writing OP and OP’s DP a bit clunky, and because I think statistically on a site like MN it’s the most likely combination. And statistically the fact that one was the higher earner with a house already makes that person slightly more likely to be male. It doesn’t change my posts, anyway)

This doesn't sound like a man I'd want to have children with. Sounds more like buying into a business partnership than a marriage.

@Lightsabre not that precarious a position, given that if they split up, she can just go rent elsewhere. I don’t think it’s fair to say he doesn’t sound caring, given that he’s happily subsidised her being a lower earner for 4 years 🤷🏻‍♀️ I think we can disagree with his position without demonising him.

Another question is, what would dp do if you didn't live with him?

Did he had a lodger before /would get one if you moved out, or would he live alone and pay the mortgage alone?

If you didn't live with your DP, would you be saving towards a property of your own?

I would say if your DP would pay the mortgage alone if you didn't move in, then all the other bills, you pay 50/50, and he covers the mortgage alone.

You save what you would pay for rent, and put that towards a buy to let property deposit in the future, or if you do get married, pay that off the mortgage when you are added to it.

If he had lodgers in the past /would get one again if you left him, then you pay the going rate for renting a room. (Not half the going rate for renting a whole house that sized!) But, you get a tenancy agreement.

None of this sounds like a recipe for marriage.
If partner won't let you go on the mortgage even with the protection of the deposit the only way you're going to get on the property ladder is to do it on your own. Either to live in yourself without the partner or to rent out if you stay with the partner

Once you start getting into the details of what the going rate is for a room etc, it kills the love. Relationships are a risk - I totally support the need to protect assets especially when relationships are new or when you have children from a previous relationship to protect. But all this picking over the detail and resentment that one of you might get something that they didn't pay enough into is not the basis for a happy marriage.

@katy1213

This doesn't sound like a man I'd want to have children with. Sounds more like buying into a business partnership than a marriage.

Marriage is a business partnership. If only more people realised that.

@Lightsabre

I think you need to buy your own place, or save up and buy a new property together or invest substantially in your own assets - stocks and shares ISA or pension overpayments. He doesn't sound very caring if he can't see that you're in a precarious position - helping him to maintain his asset with nothing in return?

Whatever you do, dont have children with him unless you get married.

Why is OP in a precarious position? He or she has lived in a home on advantageous terms until they have accrued a decent salary. There’s nothing precarious about that. You do know that outside this relationship they would not have been offered a home to rent based on a % of their salary. Utilities companies don’t drop their prices to fit in with % you can afford.

The OP has a decent salary, can save money and can invest money. They can move out and on with their life any time. Arguably getting tied into a mortgage with a low share of equity creates more risk if they split. For both of them.

The OP is a functioning adult with a good salary. He or she can look out for their financial security having benefited from living cheaply for years.

@MrsHuntGeneNotJeremyObviously

Once you start getting into the details of what the going rate is for a room etc, it kills the love. Relationships are a risk - I totally support the need to protect assets especially when relationships are new or when you have children from a previous relationship to protect. But all this picking over the detail and resentment that one of you might get something that they didn't pay enough into is not the basis for a happy marriage.

That’s complete nonsense @MrsHuntGeneNotJeremyObviously

I have lived with 3 different men.
In every case, there has been detailed discussion about money up front.

Man 1: very similar situation to OP
Man 2: we bought together with a wedding already booked
Man 3: a marriage each behind us, own houses and commitments to children

None of the financial discussions killed any love at all. In fact, in the case of the first 2, it was probably beneficial to have no financial resentment during the relationship or the breakdown.

People need to stop shying away from perfectly valid and sensible decisions.

How about - if you can’t talk about and sort out the finances fairly, with no reluctance to be open about feelings... then you’re not in love!

It doesn’t seem like he sees the relationship going anywhere to be honest. Why haven’t you got married yet?

Marriage is a business partnership. If only more people realised that.

Agree. And I also think the whole practice of referring to somebody you’re in a relationship with as your “partner” skews the way we think about these things. Two people can call themselves “partners” and talk about their true commitment to each other but the reality is, until you’re married there isn’t (and shouldn’t be) any kind of legal commitment there at all. Being somebody’s partner is no different to being their boyfriend or girlfriend. I wouldn’t be agreeing to legally share my property, bought with money I acquired before meeting a man, until we decided to actually make some actual form of commitment and get married. I really don’t blame the OP’s other half in being reluctant to do so until they actually get married.

I’m more inclined to agree with your partner.

I own a flat (well mortgaged), I had a 25% deposit and I have paid all of the mortgage payments. My partner lives with me, similar to your partner I made it clear that I wouldn’t put anyone else on the mortgage or deeds until I was married to them. I have also arranged my finances so in the event of divorce I could afford to buy him out.

Who in their right mind would essentially give away their home? Thats what you’re doing if you add an unmarried partner to your mortgage/deeds.

Hmm well if you were renting privately you’d have to pay more probably and you end up with nothing at the end of that anyway.. he put the deposit down - you’ve never had to save the deposit so you have it easy tbh.
I can see where he is coming from really.

I would suggest that you each pay 50% of the household bills and that he pays all of the mortgage. You pay the equivalent amount into a savings account in your name on the understanding that as and when you marry this is the put towards the mortgage with an agreement as to respective shares at that time. In your circumstances think that this is fair as you are meeting the additional costs of your living there with him - if your weren't he'd still have to pay all the mortgage himself. If he turns this down he probably isn't serious about marrying you. Whatever you do don't have children with him without either a marriage or serious professional advice first.

I moved in with my DP and did not pay towards the mortgage, instead I put the money I would've paid on rent in savings so I would have money if we split up. Mortgage is paid off now but I still save it. DP now DH and i agreed it was a sensible thing to do. 50 50 bills though.

I wouldn't be happy either.....you aren't married you don't have children....you didn't pay towards the deposit or most of the mortgage payments..... why should he lose his home if you break up after only a 5 year relationship? Because if you go on the deeds etc then you'd be able to force a sale I imagine

Don't pay towards the mortgage it's simple until you are married and buy somewhere together on equal footing

I assumed that while you’re paying towards the mortgage you might have some entitlement. He should really only be splitting the bills with you. Can you save and purchase/rent out your own flat?