It’s a contribution and percentages one!

[MoneyAndPercentages]

Need some advice…

Fiancé (DF) and I are buying our first house! Budget approx 1mil ( London prices, we're not getting a mansion)
We have rented together for the last few years. Background: I have 1 DC, work in a highly paid job in finance (£300k a year, average after bonuses etc) DF has no children, works a public service job that although he loves and serves a tremendous social purpose, will never come close to mine salary wise and has stagnated around £40k a year. Marriage has obviously been discussed and will happen one day but no rush. We don't want more children. So far we've paid bills etc proportionately to income.

DF has a recent inheritance and has approx 600k in savings. I have around 100k. The plan is for DF to put in 500k, then we'll get a mortgage for the other 500k, and keep 100k each as personal savings.

DF understandably wants to ring-fence the 500k. Totally get this, although we are both currently lovey-dovey honeymoon phase, I read him enough MN threads in bed for us both to know how quickly that can change 😂 I know we need to get this sorted prior to house buying paperwork.

We sat down today to build a budget, and I always assumed we'd do the 'chuck it all in a pot and split what's left after bills' method (I have no problem with this). However it's now abundantly clear I'll be paying all mortgage, bills, holidays, food etc in order for us to have similar left afterwards - to the point where it's not worth having a joint acc etc because DF can just keep his salary and I'll keep what's left after paying everything!

Here is my dilemma. DF is assuming if anything happens and we have to sell the house, he'll get his 500k, and then we split the rest because 'we've both contributed'. I'm feeling a little salty because I'll pay the mortgage (and try and pay it off as early as possible!) and think it's fair for him to take the 500k, plus 50% of any rise in value, but the rest should be mine. So if I pay off the mortgage, we’d take 50/50.

On one side, I understand I'm being a total hypocrite after saying I was all in and happy to split proportionately! On the other, I don't see why if we split up, he's entitled to the 500k PLUS money I've solely put in. In all other matters I'm fine with contributing more, this is just putting me out a bit! I think he's likely to agree either way if I bring it up.

So -
YABU - let him ring fence 500k and take 50% of the rest!
YANBU - He ring fences 500k (plus 50% value increase), I take the rest.

If you’ll be paying the mortgage and paying it off asap, then your financial contribution to the property is equal. Ergo YANBU and he’s a CF.

Sounds like you have a pretty fair deal figured out to me. YANBU.
BUT - He gets his 50% +50% of increase of value (think about what happens if the property value decreases)

I don't think he should ring fence 50Ok it will be 50pc as the value could go up or down. So 50pc plus half the equity. But I ce you reach having paid £500k he needs to pay the bills in whatever proportion you both deam fair. Why should you bank roll him? We have similar salary split to you and I pay 50pc and oh pays 50pc. It's not his fault I have a lesser job, I certainly don't expect him to pay for me. If I want more spending money I need to get a better job.

If you're both bringing 500k into a 1mil transaction you split it 50:50.

Ah yes, bills separate too. That's living costs. 0/50 for that too.

YANBU OP. I know a similar set up with a couple who did it fact split up. The lower income / no mortgage contributor left with just the original investment she put in and a bit of extra for house value increase, and the mortgage payer got the mortgaged part back as his investment. Don't forget OP, not only are you repaying capital on the mortgage payments, a massive chunk of your contribution is interest and you are paying both yours and his. I think your plan is both fair and reasonable. He lives for 'free' monthly outgoings wise, and his investment is safe in the house in the case of a split. Make sure your paperwork is tight!

I would have thought he’d have his 500 plus an eqivlant percent of what he pays in bills - so if you are paying 90% and he is paying 10% that’s the proportions you get. I don’t think he should have nothing.

I wouldn’t buy a house together in these circumstances, neither would I get married.
Have you thought about buying a property each, live in one and renting out the other, then if you split up you each have your own place and you haven’t got to mess around fighting over who’s ring fenced what and who’s paid the other. Then you split bills equally in wherever you’re living but ensure it didn’t include rent/mortgage element.

Things get tricky when your salary’s are so different.
How quickly are you planning on paying off the mortgage? When you’ve both put in the 500k it’s much simpler. I also agree it shouldn’t be he gets 500k regardless it should be based on equity. If the house decreases he shouldn’t still get 500k back

You are in very different positions so I think you need to talk it through and agree on what is fair. You have a dependent and he doesn't, You earn more but he has more capital to invest. You will need to discuss how the home and estate would be protected for your child if anything happened to you and what should occur if it were him. As you are buying at around 1 mil could you not purchase on a 50:50 basis - he would be buying his half using his inheritance you would buy yours via a mortgage. He gets a proportion of his investment plus increase on sale as do you minus the mortgage. Property can decrease of course so there is always that risk. If he owns his half outright he might be better able to meet an equal share of the household outgoings. This is where you know it sometimes gets sticky from MN experience, ie do you do it based on wages in which case you keep paying more, or do you do it based on dependents so you cover you and your child's costs and he covers his?

With your high salary and savings would it be feasible to wait a year or so, buy a cheaper house outright? Then if you split down the line you each get the percentage you put in plus corresponding increase in value?

Why don't you just get the mortgage in your name and split it all 50:50?

In your scenario I’d suggest he gets 50% of the sale value, and you get the rest.

It would be different if he was contributing to the mortgage, but if you’re paying it all he’s just getting 50% of that value for… happening to have more cash upfront?

My DH briefly flirted with the same idea and realised it was unreasonable. It’s a home you’re buying together, not a shared ownership scheme where you’re renting part of it off them.

Because he won’t be able to afford £1500pcm mortgage payment on a £40,000 salary.

You need to do it by proportion.

Personally I'd insist on bills excluding mortgage being split 50/50.

The ownership of the house should be split 50/50 if your half is the mortgage and his is the inheritance. This should be done in %.

This sounds like a headache to me too. Aside from the mortgage bit, he shouldn't be contributing nothing to bills (basics like council tax, water, energy, broadband etc plus food). Why does he think he shouldn't? He'd have to pay those regardless of who he lived with. That will still leave him with lots each month.

I'd also think carefully about getting married and what happens re. Ensuring your child doesn't lose out in inheritance.

Thanks everyone,

I get what's being said about decreases, of course that will be factored in (I'm just hoping it never happens 😅) but yes would be written percentage wise not that he takes the first 500k, was just trying to say that for clarity!

So it seems fair to go for 50/50 if I just take the mortgage out in my name? I'm happy to do this and makes sense but want to make sure it doesn't seem unfair as in theory DF is happy to contribute to the mortgage but percentage wise it's just not realistic.

I would also ask him how he feels if you did get married.
How he feels if one of you couldn't work as you were injured or had a stroke.

I would even suggest not getting a house together until you are married.

He needs to pay 50/50 towards bills. End of.

If he can then also afford to contribute to the mortgage and you have a better chance of getting approved with him on it then sure he can be added but is ownership of the house should then increase proportionately

I think a 50/50 split of the entire value is fair - you’re both effectively contributing half to buying the house, it’s just his half is in cash and your half is the mortgage. Obviously “your” 50% would have any outstanding mortgage deducted while his wouldn’t.

If he's putting in 500k , he owns half the house and should get 50% of whatever the value of the house is when it's sold. You also get 50% but the outstanding mortgage should come out of your 50%.

I dont get the point about you paying interest for hjm made by a pp, his deposit is huge and reduces the payable interest.

Personally I think this is messy , and in his shoes I'm not sure I'd buy a house with you- he's more vulnerable than you as he'd be putting in a significant chunk of money, more than he'll likely see again and unlike you doesn't have the means to accrue such high sums again. He'd be better off buying something on his own or waiting until you can almost match his deposit (obvs with you paying more bills it wouldn't be fair on you to match it equally, but at the moment there is a 400k discrepancy in what you are putting in).

That being said, I don't think you should sub his bills. Obviously you have huge income discrepancy and i assume on 300k you won't want to limit yourself to what he csn afford so will need to share finances to some degree, but he's on 40k so can definitely afford the odd bill.

I earn less than my DH by 3x, although not talking the sums you are, he pays more of the bills but it still gives me a sense of pride to pay what I can.

To be clear, lots of this is on me. DF has simple tastes and would be happy living a life he could afford and splitting 50/50. I just like the finer things and enjoy sharing them.

I suppose we could go 50/50 on bills etc. It seems unfair to not have equal amounts of spending money though ~ to be fair, knowing DF he'll end up saving most of his anyway.

In terms of provision for DC if anything were to happen to me, this is covered. It's a macabre obsession of mine but he's set for life if anything happens!

@Hellogoodbyehello4321 this is a really interesting point about it might not being a smart move for him. I'm aware he's suggested it because he knows I'm putting a lot more in and wants to ease the burden.

I think the fairest is a 50-50 split on everything.

He puts in £500k. You alone get a mortage for £500k. Your equity is 50-50.

You then split the bills 50-50. He won’t have a mortgage to worry about so will have more free cash than if he were to buy a house on his own. You’ll obviously have more free cash, then maybe you are paying for the treats and holidays and nice stuff.

Thinking about this more OP, I think you are possibly looking at this the wrong way round. I think the house should definitely be 50/50 because he has paid for his half upfront.

However while you are carrying a 400k mortgage and he's sat there with his half mortgage fee, I dont think you should be subsidising his living costs as then you do end up worse off than him

So I'd probably do something like split bills 50/50 but he doesn't contribute to the mortgage as he's paid his half off upfront. On 40k with no housing costs there's no reason he can't do that and still have disposable income.

And then rather than share your income with him, I'd use your salary to pay down your half the house as much as possible. If you do want to do the odd thing he can't afford , holiday or whatever, then maybe you can fund the odd nice thing for him but my priority would be getting yourself on an even keel with him.

Obviously that kicks the can down the road as at some point , when the mortgage is paid off, you'll need to decide if you are going to share finances, but at least you're doing it knowing you both have the same equity in the house.

Its a messy one tbh.