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Original poster

How would you split our mortgage? (What is fair?)

22 replies

Redpolkadotpot · 11/10/2021 21:10

Hi all,

We would appreciate some views from unbiased outsiders on our situation, as we both want what is fair.

Approximately:

House worth 300k
Mortgage 200k
Equity of 100k is roughly split 90/10

We estimate the repayment mortgage to be around £950 (for 18 year mortgage) as we will be fixing it within the month (currently on a viable rate).

We will be creating a trust deed to protect our deposits/equity with any house price increases to be split 50/50, so our question is mainly how should we split the repayment mortgage?

Partner is fine with paying more but wanted his higher contribution to increase his equity share in comparision to mine, but I didn't feel this was fair, or more so, I didn't know how to calculate it so that it would be fair i.e. percentage of mortgage repayment isn't like for like for percentage of equity...if that makes sense?!

Other notable things that may impact your thoughts:

Partner and I have lived together for 18 months, but officially together 12 months (he moved into my house as a tenant!)
Partner earns around £5k more than me but as I have a big pension contribution (not really by choice), his net income is roughly £500 more than me per month but he gets no sick pay, low pension etc.

To clarify, it's only because the relationship is still considered new that we're being so calculative, we both know that all of this only matters if we split which neither of us want, we both see this relationship to go the distance i.e. talked about marriage and potentially having a family one day etc.

Thanks in advance for reading to the end and any constructive opinions you might have

OP posts:

PooWillyNameChange · 11/10/2021 21:36

I think right now if deposits are ring fenced then equal contributions make sense. If you marry later on it'll all become shared anyway. Before you're ready to commit to merging finances I'd go with a 50/50 split.

InTheLabyrinth · 11/10/2021 21:48

The 90k/10k gets ring fenced.
The mortgage repayments are split in whatever proportion you take of the house price rise (decrease!).
So, if you paid 100% of the mortgage, you would walk away with everything left after the equity split. If you pay it equally, you split it equally. If he paid 100% of the mortgage, you would walk away with 90k, him with everything else.

moonshine3600 · 12/10/2021 07:58

Our deposits are protected as we put different amounts in, we share the mortgage equally so anything gained if to split and sell is then shared 50/50 between us

SvartePetter · 12/10/2021 08:04

What about if the repayment part is split 50/50 but the interest part is split according to percentage salary? Will require a spreadsheet exercise though as the number will change over time.

Mantlemoose · 12/10/2021 08:06

50/50 in my book, that's what a partnership is. DP brought 50% deposit to our first hone together and when solicitor offered to protect it he said no, we were either in it together or not at all. 30 years later due to an inheritance I've just paid our mortgage off in full.

Dyrne · 12/10/2021 08:22

In your case I’d have it so that it returned your respective deposit contributions to you and then split everything else 50/50.

You then each contribute equally to the mortgage.

It seems unfair that you want your DP to pay more without compensation even though he’s not massively out earning you; meanwhile you get to pad out your pension at his expense.

It’s different when children come along or one of you has to make career sacrifices to support the other; when that happens it makes sense to tweak contributions etc as you’re acting more as a family unit.

Cattitudes · 12/10/2021 08:27

I would get him to put in more to his pension/savings and then contribute equally to the mortgage. Maybe stretch the mortgage over slightly longer.

AwkwardPaws27 · 12/10/2021 08:39

Honestly? The fact you've only been together 12 months would concern me a little. In your shoes, I'm not sure I'd add him to the mortgage yet.
I'd fix in my own name only for 2 years, & review then. Best case scenario, you are married by then and none of this will matter.

SeasonFinale · 12/10/2021 08:51

If he is paying say 60% of mortgage and you only 40% that is how any accrued equity should accumulate too. If you want an equal split the n pay it equally.

£5K difference in pay is not significantly different. You are getting the benefit of adding to a pension whether it is choice or not. He should make provision to add to his too not just give you the benefit of paying less mortgage.

Cruiser11 · 12/10/2021 09:38

So is the house you both living in your previous house or are you buying a new house together?

yourestandingonmyneck · 12/10/2021 09:54

@Cattitudes

I would get him to put in more to his pension/savings and then contribute equally to the mortgage. Maybe stretch the mortgage over slightly longer.

I second this.

Original poster

Redpolkadotpot · 13/10/2021 09:39

Hi everyone,

Thank you for all your input as I feel my mind is more at ease at just going 50/50. It does make sense to me to mentally separate the deposit/equity from the mortgage repayments which I guess I'm now seeing as investing into this asset we call home.

And yes £5k pa isn't that much but £500pm feels like a lot and he has scope for increasing wage within the next few years whereas I am unlikely to, but I agree, we've both said for him to regularly pay more into his pension and savings.

OP posts:

Original poster

Redpolkadotpot · 13/10/2021 09:40

@Cruiser11

So is the house you both living in your previous house or are you buying a new house together?

Previous house.

OP posts:

fromdownwest · 13/10/2021 10:37

Your incomes are not vastly disproportionate, So I think 50/50 would be the least stressful and most sensible way.

As someone mentioned, if you only pay 40% then in theory you will be entitled to only 40% of the equity growth.

Just pay 50/50 and if he wants to pay into his pension great, if he doesn't then that is ultimately his choice.

Embracelife · 13/10/2021 14:07

Ring fence deposits. Rest is 50 50. You both "renting" equally from the bank. So pay equally. Up to him to pay into his pension.

Keep record of who pays for major renovations

wallysally · 13/10/2021 14:08

To be honest I wouldn't even entertain the idea of buying a house with someone I had only been with for 12 months

fromdownwest · 13/10/2021 14:20

@wallysally

To be honest I wouldn't even entertain the idea of buying a house with someone I had only been with for 12 months

This

Embracelife · 13/10/2021 15:49

So to clarify as was confusing deposit with current equity

House worth 300k
And is in your name only?

Mortgage 200k in your name obly now?

Equity of 100k is roughly split 90/10

How fo you working that out? The equity is based on current Value? It is on your name so is your equity? Equity is not real money it is only the current value less the loan

How you work that ?
Do you mean he putting 10k as a deposit?

If value goes down
How will it be worked out?

Embracelife · 13/10/2021 15:53

If you not putting a deposit on a new property together it s confusing.
Is he he putting 10k into the house?
You are not paying a deposit as it us yours what deposit did you pay when you bought the hpuse initially?

Cruiser11 · 13/10/2021 18:01

If you can afford to pay for your house by yourself I’d continue to do that for now.

IceCreamAndCandyfloss · 13/10/2021 19:17

I’d rent but not buy with someone I had only known for 12 months as it has the potential to go wrong.
50/50 on all bills regardless of income as both should make an equal contribution rather than have the other subsidise them imo.

AwkwardPaws27 · 13/10/2021 19:22

@Embracelife

If you not putting a deposit on a new property together it s confusing. Is he he putting 10k into the house? You are not paying a deposit as it us yours what deposit did you pay when you bought the hpuse initially?

Presumably they are remortgaging, so OPS "deposit" is her equity, & her DP is paying £10k (so they take a lower mortgage, at a lower LTV).

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