Buying a house, how to protect our £?

[Downwiththatsortofthing252]

A little background: Myself and DP have been together for nearly 6 years, not married, and have a 1 year old DS.

We are buying a house together, and getting towards the end of the process. There is one sticking point; we both want to be sensible and set it down in writing how to split the proceeds of any house sale if we ever broke up.

We are going to get a deed of trust done, but can't agree on how to protect our uneven deposit amounts. We will both be paying 50% of the monthly mortgage going forward.

The deposit is £26,000; A will be putting in £21,000, B will be contributing £6,000 (figures made up but comparable to RL).

A wants the deed of trust to reflect the percentage of capital put in. So if the house was sold in future for a higher price, then since they put in a larger amount of original deposit, they should get a larger amount back of the sale proceeds.

B wants each person to get back their original deposit, and then split the rest of profit (if any) 50/50, since the monthly payments are 50/50.

This is all hypothetical, since we don't have plans to split, however it's causing arguments so would like some other perspectives on this please! Who is right?

A would only be fair if A was going to pay the same larger % of mortgage repayments and all maintenance and improvements.

Not if future expenses are 50/50.

Surely A is the fairest as there must be some return on the extra deposit they have put in???

If A put in 25% and B but in 5% that's what they should get back. They are putting in a proportion of the value. Doesn't matter if a couldn't do it without b or vice versa. Then anything left is split 50/50 because that's how the investment has been made.

Just to say that I think that it's very sensible and pragmatic to be thinking about the legalities and practicalities before any split takes place and things get difficult and emotional.

I think that the middle way suggestions on here are good.

If the money hadn't gone towards a house deposit then it could have been invested and be earning interest and/or capital growth.
On separation, pay back the deposits+uplift as above (formula to be decided in advance). The balance of equity is then split 50/50.

This should only stand for a certain number of years (specify the number or when youngest DC reaches 18?) and then just go with 50/50. It would be absurd to still be arguing this when you get to end-of-life scenario.

Have you spoken to solicitors? Presumably they have seen this before and can advise.

Middle way as suggested.

But do Bear in mind that if you split up it may in fact not end up that way as child maintenance and housing etc could mean a "fair" settlement at that point wouldn't necessarily be the one you laid out now- more DC, changed circumstances etc.

Still, good to have it as fair as possible and something you both agree on now.

We did A when we first bought as deposit was provided by DH's (then DP's) parents. We were both working full time and split everything equally and earned similar salaries. However I wanted to ensure my PIL were satisfied they didn't think I was trying to take their son for a ride. Subsequently we are married and have moved and it's all now 50/50.

I think A is a good starting point but would aim to move to 50/50 when you next buy.

Thanks all for your replies, sorry to reply late!

We have gone with B, the main reason being my earning potential has gone down since having DS and I would have had a lot more deposit to put in if it hadn't been for maternity leave. I was doing quite well and got into a pattern of saving a lot every month, but that stopped too soon!

Also we will be splitting expenses evenly from now on, so B makes sense for us. Thanks again