AIBU - house purchase with partner

[Whatshouldidoinlife]

Hi all
Just wanted thoughts.

Partner and I want to purchase a house together.
purchase price £700,000.

I own a house and my partner rents.
My partner would pay stamp duty in region of £25-£30k.

I would put down my equity in house as deposit and ring fence that percentage of property of price and the remaining percentage would be split 50/50.

I would pay an early exit mortgage fee and the estate agent fees (around £6k).

My partner earns 3 x as I do.

If we put in our salary percentage wise -70/30 to my partner and shared the rest of the equity (bar my deposit) 50/50 does that sound like a fair deal?

Have I missed something or do I need to consider anything else?
I want to be fair to myself and him.

He doesn’t have zero savings, OP has said he is paying the stamp duty 25-30k!

Apologies, my mistake, misread it.

You need to protect your asset so that you can walk away with exactly what you have put down in deposit plus an agreed percentage of the market value increase when it does sell. You must sit down with a property lawyer (on your own, not with your partner) and work out how to do this, and then you agree to draw up the papers with the partner. If he throws toys out of pram about this, do not buy a house with a man-child; that will only end badly. I think it's called a no-nup (?) as in you're not married, and although there are no kids yet, there might be later on, so you need to specify what happens to the house then with your financial share in it... e.g. can he live in it for X years and then can sell and give them your assets, or whomever else is in your will. It's lawyer territory, don't even think of him being the person to lean into about what is fair or not down the line.

They aren’t “a team” because OP is legally protecting her deposit amount (which is the right thing to do), but then wants HIM to share his equity. You can’t only be a team when it suits you 🤣 if they’re a team then no ring fencing and share it all. The financially wise thing for OP to do is protect the deposit, the financially wise thing for him to do is claim 70% equity if paying 70%.

I agree. If someone posted saying "I earn 3x as much as my partner so will be paying more of the mortgage, but he wants the equity split 50:50" the response would be that he's taking the piss.

You need to protect your asset so that you can walk away with exactly what you have put down in deposit plus an agreed percentage of the market value increase when it does sell.

I agree. Although I'd subtract her half of the stamp duty from the deposit amount. He could say he wants her to pay her half (£15k) so that he has £15k he can put in as a deposit that he'll get back. Otherwise he will lose his full £30k while she keeps her whole deposit.

I know what you're saying of course, but her deposit is enabling the sale and this won't 'grow' - so she's making the purchase happen with her deposit but only getting 30% of the equity if they split.

He’s paying 30k stamp duty, the sale wouldn’t be happening without that either.

Just to clarify my deposit would be £300k and without this we wouldn't get the rates or the property. Yes everything would be through a solicitor. He wants to pay more as he sees us as a family but l just vary of losing my home if anything goes wrong.

Yes, of course they can slice up who pays what to purchase, but OP hasn't said what percentage of a deposit they are each putting down, because when it comes down to it out the other end, that is what matters most, legally, that and the market increase.

To be fair I could pay this he wants to to be able to contribute towards the sale as he doesn't have a deposit the same or similar to me.

If you mean a conveyancing solicitor to purchase the house, that is not the same as a solicitor who deals with the assets if it all goes wrong... that is a different document that you two need to draw up as you are not married. I would not let him pay more of the mortgage; that will be sticky wickets down the line. Draw up a contract that nails down that you walk away with exactly the percentage that you put in plus market increase, as does he. If he gets all toxic male about not contributing more to make up for his lack of deposit, remind him that the reality is that he has less deposit, that is just how it is.

I know it isn't what you asked but I would not buy a house together with a partner unless we were married (or going to be VERY soon).

My cousin has done it a couple of times and it's ended really badly - co-owning a flat with an ex boyfriend, who wants to stay in it and not sell, then not being able to buy a place with the current partner becasue all her equity was tied up etc...

My husband and I did buy our house before we got married, but only by 3 months, and I wouldn't have done it otherwise. When you are married, everything is jointly owned, so it's much simpler.

So let him pay half.

Ring fence your deposit.

You then decide what proportion you will pay of the mortgage and the equity is divided the same way eg you pay 50-50 and you share 50-50, or if you feel you can’t afford that then he pays 70% but then gets 70% of the equity if you split. Stamp duty should be split in the same proportions as it’s part of the purchase costs.

The mortgage and estate agent costs relate to your sale and should come out of your equity.

If we put in our salary percentage wise -70/30 to my partner and shared the rest of the equity (bar my deposit) 50/50 does that sound like a fair deal?

A fair deal for you but not for him. If he’s paying 70/30 in mortgage payments then he should get 70/30 in equity if you ever decide to sell. Your fees for your sale should just come out of the money from your house sale. Definitely a good idea to ring fence your deposit. Unless he is happy to go 70/30 then 50/50 is the fairest way, you’re not married and no children

This assumes the property goes up in value. There was a post here recently where the property had gone down in value, the couple had split and he lost all of his deposit and the OP was trying to work out if the GF who hadn't put in any money initially should magic up £15k to pay her ex for the fall in value.

If anything goes wrong you will lose your house as without his income you won’t be able to afford a 700k house. You won’t lose all your money though if your deposit is protected.

"He sees us as family". What do you see ahead. We are hearing a lot about what he sees and wants and needs. Look, I've had so many mates burned by this co-habitation nightmare of buying with men who don't have the financial equality; it is an absolute street fight out the other end. Go and see someone on your own and protect yourself. Buying a house is grown up stuff, and he sounds like is behaving like a bit of a man-child already, with all this, "I see us as a family nonsense," this isn't a fairytale, it's business. It's business! You wouldn't start a company with a person without getting legal advice.

why is he paying all the stamp duty? These costs should be 50:50 and then he should put the remainder as a deposit.

But without him would you be able to get the mortgage that you need? It’s ok having a large deposit and money for stamp duty but it’s pointless if you can’t get the mortgage you need

Exactly, if she protects herself now (just like a pre-nup in a marriage) she will walk away with the exact percentage that she has put in plus market value, enough to buy a really good flat, or a nice smaller house. If he doesn't want something drawn up, ask yourself why?

If you aren't married and have no shared children then you pay 50/50 and get a house that's affordable to the person on the lowest income.

Once marriage and kids are discussed, and in the picture, it all becomes a family pot.

OP doesn’t say he doesn’t want anything drawn up, it’s all being done through a solicitor

I think you should protect the deposit as a percentage, not a fixed sum. That way you benefit from inflation as you should do. Otherwise if you split in, say, ten years, you get £300k back, but it's only "worth" (say) £250k in that financial market due to inflation. Your buying power for a new property is not maintained.

So, you need to do some serious maths! And speak to separate lawyers.

Of course, especially with the current market, but in that event it is especially important that her deposit is protected and not levied against his extra payments, etc. That is messy. If she puts in 70%, she walks away with 70%, that's it. If he wants to pay extra mortgage payments, I'd say no to that and buy something cheaper. He will claim down the line that he deserves more of the house and then it will cost a fortune in lawyers to unravel the mess.