Buying a house

[Porttiny]

Buying a house with my partner. He’s putting in a bigger deposit, I’d be paying exactly half of the mortgage every month (interest + capital). He thinks that if we ever sold, we should each get our deposit back and then split any profit in proportion to what we put in initially.

I’m uncomfortable with that because the deposit is a one-off and comes back out on sale, whereas the real risk and equity building is in the mortgage, which I’d be paying equally. To me it feels wrong to pay the same for years, take the same debt risk, but come out with less.
He says his extra deposit benefits me via lower monthly payments and that he could otherwise invest it in stocks and shares but this doesn't make sense to me. Anyone could do that though. I think he's incorrectly linking the deposit to the mortgage debt.

In his version, we take out lets say a 400k mortgage. I contribute to this equally. Let's say we separate having paid off 200k. Id come out with 50 and him 150k but we'd have both paid equally.

AIBU for thinking that if we split the mortgage 50/50, any equity created by paying it down (and any increase in value) should also be split 50/50? Or that if profit is weighted, the mortgage costs should be too?

I think this is the fairest. Anyone saying you get the same pound note deposit back is ignoring that he would be better off not putting that money into the property and instead growing it via investment elsewhere.

If it’s a 20% deposit split 75:25, then on a future sale 20% of the sale proceeds should be split 75:25 and the rest down the middle - so he gets the growth on his additional deposit. Or he loans money to you so you both have the same deposit and you pay him interest on that loan.

That’s the only way I’d be buying property with someone I wasn’t married to (or imminently marrying).

Or, agree things before purchasing and get it documented legally.

There's also solutions such as tenants in common where they own a certain percentage each rather than jointly owning the whole house. Useful way to buy together and protect your own finances, should you not wish to get married.

For the record, I did things by your "correct" rules, and neither of us had anything to protect when we met so built everything together. But that isn't the case for everyone and for some women getting married isn't the protection it is for others.

This.

Exactly. He pays a percentage in proportion to the deposit and takes that proportion of the sale price when the time comes.
Or you buy somewhere cheaper with equal shares.

I don't think many people are lending their partner part of the deposit and charging them interest (even if they should). Original deposit £ then everything else 50:50 if you're paying the mortgage 50:50 is fair and easy IMO.
His suggestion of splitting in proportion to the deposit rather than the mortgage is unfair because neither of you pays interest on the deposit and, unless you both agree otherwise, he is agreeing to own 50% of the property no matter how big his deposit is

The deposit will hopefully be small in comparison to the selling price. And if you stay together it will be irrelevant anyway. I think it's fair enough you each get back your share of the deposit, but the rest should be shared 50:50 if you split up as you will be paying for half of the remainder of the house so you should get half of that portion back.

How much more is his deposit than yours? Could you pay him back half of the difference (plus interest) over time to avoid this argument. Or just buy something cheaper so your deposits are the same. Or be unequal owners and each pay into the mortgage in proportion to your deposit amounts and ownership %, then you are paying in proportion to what you get back.

If he is paying a huge amount more on the deposit I might see his point, if it's him £100,000 and you £10,000 he really is reducing the loan payments a lot, if it's him £50,000 and you £40,000 not so much.

Neither his way nor your way is fair.
In your way he effectively looses money as his 40k deposit will be worth less in a few years. In his way you don't get a fair share of any equity built.

You need to consider the house as shares. For example - if house is 400k, you divide it by 100 with each share costing 4k. He puts in 40k he gets 10 shares. You put in 20k you get 5 shares. The remainder of 85 shares is split between you equally if paying mortgage equally. He therefore gets 52.5% of any profit after deposits are returned. You get 47.5%.

Or he just pays in less so deposits same would be the easiest option.

I agree with you. You each get your deposit back and then split and profits equally.

Sounds like neither of you could buy without the other so that seems fairest to me.

Yes he could have put his deposit money into stocks and shares and you’d both be paying more interest with a bigger mortgage. So maybe that would balance out with his savings interest (who knows?) maybe he’d make a few quid more but you’d both probably have less disposable income right now which isn’t great.

Out of interest, what sort of a difference are we talking. Did he put in £50K and you put in £10K? The bigger the gap the bigger the issue. Though my husband put £100K in and I put about £20K maybe and we never even discussed it. I like to think over the years I’ve given him £80K worth of support.

I think you should tell him that it's a firm no to what he is proposing as a concept. No solicitor would recommend that you sign up to that. He's absolutely barking [and financially illiterate]

We did exactly what is being proposed by many, ring fenced our deposits as they were materially different and split the equity in a legal agreement based on equal repayment obligations.

I would be very wary of buying a property with this man. Have you had a conversation about children? If you have a child before marriage does he think you are going to contribute equally to the mortgage while on maternity leave? Will he support you whether you are married or not?

You should both be talking through all the possible ways in which paying this mortgage could be challenging for one or both of you. Instead you are both falling at the first hurdle [well he is imho]