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.

Surely to have equal amounts of spending money you'd have to give him an allowance?! It's right that he pays half of utility bills (which presumably wouldn't be much different from where you currently live as it doesn't sound like you're moving somewhere huge). You should both be responsible for living costs. You're not his parent.

I don't think you need to feel bad about you having more money. Use it to pay off the mortgage, put money aside for your dc etc.

House is worth £1m. You pay £500k each (him using his inheritance, you with your deposit plus mortgage in your name only).

You own the property in equal shares and if it is sold then you each get 50% of the sale value (but he gets his half in cash whereas you are solely responsible for redeeming the mortgage).

As for bills, it totally depends on your approach to sharing money. If you think you should each be contributing equally, you each pay 50% of all shared bills. If you think it should be proportionate to your income then do that. If you think you should each have equal spending money then have both your salaries paid into a joint account, pay all bills out of that and then pay yourselves each an equal amount for personal spending.

In general I would favour the "everything into one pot and you each get equal spending money" approach, but I don't think that will work in this scenario. If you are solely responsible for the mortgage then your mortgage repayments will have to come out of your income, not joint income. This means that out of your joint pot, after bills are paid, your spending money would need to be enough to cover your mortgage repayment and the cost of raising your child, plus your actual personal spending needs, and then he would have to get an equal amount each month, meaning that he would actually have a lot more disposable income than you even though it was coming mostly from your salary. That doesn't seem fair on you or your child.

If he can easily afford to pay 50% of the bills on his salary (given that he won't have a mortgage to pay) then it might be better to just split everything 50/50. If you don't want to do that and feel that he should be contributing less to bills, try to agree a proportion which doesn't result in one of you being in an unfair situation compared to the other.

It's certainly not straightforward.

You also need to think about what happens to house if you predecease your partner. Do you want to leave your half to your child? If so, that needs to be factored in.

Agree with others, you both 'own' 50% of the property - his through the inheritance and yours through a mortgage.

If you split, you each get your 50% back plus any increase to the value of the property.

With the day-to-day expenses he should still be contributing something to bills and living costs even if it's effectively a token contribution. You have such a massive disparity in your wages that you are always going to have more disposable income so maybe you choose to pay towards holidays, meals out etc. he's mortgage-free and his inheritance is effectively protected but I don't see why all of his income should just be his spending money.

Why should he pay household bills 50/50 when OP has a child and expensive tastes while he has simple ones.

If you take the advice of quite a few here, the problem will solve itself because he will leave. I think he should leave anyway. There is too much income disparity. I wouldn't want a life of being looked down on financially with a partner who's more interested in the percentages than in me.

I have to admit, this may not be what's truly going on here but it sounds like it and maybe the tone of the responses are making this all sound uglier than it is.

On another note, I certainly wouldn't want to give up five hundred thousand out of six from an inheritance in one fell swoop, when it will never be possible to replace.

If the sexes were reversed, the OP would be getting it right in the neck.

I think he does need to chip into the non-mortgage bills as you need to prioritise overpaying the mortgage to save on interest.

You need to put your £100k deposit in and have a mortgage of £400k only.

I think he should own half the house and you get and pay the mortgage for the rest and then you overpay loads, split other bills as you are doing now on the percentage wise basis that is already working for you and if you want more expensive meals out and treats you cover those. We have something similar in that my DP has paid half the house with his inheritance and while we shared all bills including mortgage when DC were small now I have got new job and pay raise and gone back FT I am going to now take over the rest of the mortgage until it is paid off. We earn close enough though that splitting bills 50/50 means we have not too dissimilar disposable income even after I pay the mortgage. Presumably you could pay your half off really quickly on your income

It might be better for you to buy as tenants in common rather than joint tenants - he buys half, you buy half. Then jf you split up he gets his money back plus half the increased equity and you get half the original purchase price less mortgage plus half the equity.

I think your salaries are so incomparable it's not fair to split things by proportion as realistically you'll be paying it all. So you might feel better about it if you're buying "your bit".

Make sure your will is watertight tho in terms of who gets his bit is he dies first as it doesn't pass on automatically like a joint tenants arrangement and making sure it's all left to your child.

See a solicitor for some advice (and before anyone says it, no you won't get a free half hour to resolve this!) to understand the options as a business transaction rather than a romantic rose tinted specs fuelled one, you'll thank yourself further down the line. It sounds like marriage is a "when we get round to it", so at the moment you are in the eyes of the law just two people buying property together.

I would be interested to what people would be saying if the roles were reversed. I suspect that if the OP was the one earning significantly less she would be encouraged to get married, make sure she had equal spends and made sure she had half the house plus something in the will to allow her to stay in situ for all her life

His "share" is cash yours is mortgage. You effectively own half each so if sold at a profit you would both get half the value. You can't match his cash deposit so if thinking about bills it doesn't include the mortgage. The rest of the bills should be split proportionally by income. Can't you find something a bit cheaper? You can pay off the mortgage share quicker and he has more of a financial cushion.

The house is quite straightforward you both just own 50 percent of it as that's your contribution via mortgage or deposit. The challenge is the other household bills cheated by the huge income disparity.
1000 to someone who takes home 2600 a month is a much bigger impact than for someone taking home over 14000 a month. How you split it depends on your dynamic, for me, when living with a partner we've always split household bills proportionally when there is a big difference. The higher earner was still adjusted better off. Some just share all income, I don't know many who do a 50/50 when one earns much more.

Set amounts isn't how selling property works, so he can't ring-fence £500k. Property is worth whatever people are prepared to pay for it when you sell, so he should be entitled to get back 50% if that's what he puts in. He should also be paying for half of all of the fees, costs and stamp duty.

It seems he is getting a pretty good deal here. When you earn money you sub him and when he inherits money it is all his. You say you are still in honeymoon phase, so how long have you actually been together and how well do you know him? He really should be paying something for bills if you buy together, or he is entirely living off you and has his entire £40k before tax to play. You should also be in a position to have more than £100k savings if you are on 3x that annually, so do consider what you need to save for you, your pension and your child.

This seems very straightforward if looking at it as an investment. Together, you buy a 1 million flat in london. He pays half up front via his inheritence, and you pay the other half via a mortgage. Therefore you are liable for all mortgage payments, but you each own half the property, and if you were to sell in the future, you each would get half the selling price, even if this resulted in a loss (i.e., selling price less than the 1 million purchase price). His £500K is therefore not "ring-fenced", as it's an investment, better to view it as owning half the property. The downside of this, for him, is that he should be expected to pay half of all running costs (such as utilities, council tax, and water), even if that represents a greater proportion of his income than for you, but this should be ok, as he doesn't have to pay the morgage. If he can't afford half of running costs, then another model needs to be empoyed, such that he own a smaller proportion of the property because you are contributing more to running costs.

Anothefr point, which hasn't been discussed, relates to your DC. If they will be living with you, then perhaps you should be responsible for a grater proportion of running costs (although this may depend of age of the child and contributions from other parent).

"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!"

I would go with your original plan, even if in the end it's not so different to him not paying anything at all. It's more flexible to change in circumstances. It means that he's contributing his £40k to the family pot, and so is contributing 40/(300+40) - i.e. ~11.8%.

Just do it all as a mortgage and pay the mortgage fairy, you out of wages and him from his inheritance. Either that, or the £500k plus 50% of increase is his, the rest is yours. He's a CF.

Given your salary, surely you can save 100k a year. Wait 4 years, Equal contributions. No mortgage.

Not sure I would be marrying him, especially as you have dependent. You are effectively gambling the child's inheritance. I know your child isn't entitled to it and you can do what you want with your money but even so.

You're engaged so I don't understand why you don't just get married.

Then all money is family money. The £600k he's bringing plus whatever you're bringing and your respective wages.

I definitely wouldn't get married. There's no reason for you to and I would worry about inheritance for your child.

If this post was written the other way round with the sexes the responses would be very different!

Not from me.

I don't understand people getting engaged if they're not getting married in the very near future.

Once you're married, you combine finances. DH recently got a large inheritance which we both view as our money.

Strictly clinically speaking.. you need to add your 50% into the home purchase. You carry the £500k mortgage as your contribution to the home, as DF has already added his share. (your income allows for this). This created a clear demarcation of equity invested. You both then own 50/50.

If you didn’t have the £500k inheritance to use, you simply wouldn’t have a home together.. hence you are both still renting.

considering your £300k pa salary, How are you not able to have a higher savings rate?

how do you manage now as renting?

So basically anything he puts in he wants to protect as his, but anything you put in, he wants 50% of AND on top of that, wants you to pay for everything whilst you’re together, all bills, holidays etc?

Sounds ridiculous.

Its mad he wsnts to ringfence money but will be substantially better off by being with you. If you're willing to chuck all in a pot (300k and his 40k) and share, he should share his part.

Speak for yourself, you don’t have mind reading skills and have no idea what we would say, but think you can imply we’re all sexist?!

If you have double standards, that’s on you, don’t project them onto the rest of us.

We had a similar situation. I earn more but the disparity is more like £40k not £260k!

We are not married and when we bought a flat he contributed 50% in cash (money from the sale of a previous property) and we got a mortgage for the remaing 50%. I pay that. However both our names are on the mortgage as it makes it easier and protects him.

Our deed of trust agrees in the event of relationship breakdown we each get back what we put in at that point, plus 50/50 of any equity gains. So my proportion of contribution goes up as more of the mortgage is paid off. Think about it if you split after a year and you have paid off £100k of the mortgage he has contributed 50% and you have only contributed 10%. His 50% should not go towards settling the outstanding mortgage you haven't paid off. I would also think about a will.

I think bills and maintenance need to be separate.