Mortgage Pay Off DH half only

isthewashingdryyet · 29/12/2022 12:39

I don’t understand, surely as a married couple you have a joint account for joint expenses like mortgage, utilities, car expenses, food, child expenses, holidays, insurances and so on.
Some people contribute to this on a percentage basis and others put it all in and then take an agreed amount to each person for personal spends.

Savings can be held in joint names or in each persons name but in a marriage this is moot as all the money belongs to both of you

So a change in mortgage payment just means less is needed in the joint account and more is available for you both to add to pensions or holiday fund or whatever.

Anything else is not fair

Yaslana · 29/12/2022 12:43

Why do you think that you will pay more interest?

And if you're married, how is it his half and your half?

nancydroo · 29/12/2022 12:43

Not sure OP but imo when you're married his savings are your savings surely? It seems so mean of him. It would be nicer to say 'hey I've these savings let's just pay the mortgage down a bit'. Is this a second marriage? Perhaps get advice from Citizens Advice Bureau?

custardbear · 29/12/2022 12:46

Eh? Surely you share? I earn double what my DH earns that doesn't mean he contributes less - we share

Idontgiveagriffindamn · 29/12/2022 12:49

Some people work finances differently and don’t have joint accounts / view things jointly.
In answer to your question no it wouldn’t mean your paying more interest.

LittleRedYoshi · 29/12/2022 12:50

Would this leave me paying more in interest than I would if we both kept paying at the same rate?

No. But since you're married, all the assets are joint regardless. He can pay off half the remainder of the mortgage if he wants, but he'll still be jointly liable for what's left - it doesn't then become your sole responsibility.

Likewise, if you were to divorce then it would be be irrelevant if 'he' had way more savings than you, or if you had put 'your' money into pensions instead - it's all considered joint marital assets.

Deckthehallswithbenandhollly · 29/12/2022 12:51

But you have children, why aren't finances shared for mutual benefit of kids?

Bobshhh · 29/12/2022 12:51

What? I earn more than my husband and we both equally pay for the mortgage but if I decided to pay more off it wouldn't be allocated to 'me'', it would bring the payment down for both of us.

MrsSquirrel · 29/12/2022 12:52

How would you be penalised? Isn't the interest a percentage of the outstanding amount? If you paid down the capital, it would be the same percentage of a smaller amount. You really need to look at the terms of your specific mortgage deal.

Also, how does a mortgage have his half and your half? If it's a joint mortgage, normally it would be one loan in both names.

mynameiscalypso · 29/12/2022 12:52

It's sort of artificial because your mortgage lender doesn't view half of the mortgage as his and half as yours, you're both liable for the whole thing. What you're basically saying is you (as joint mortgage holders) want to pay off half the mortgage, note that there might be some sort of early repayment charge for this. The balance of the mortgage can then be spread over the life of the mortgage reducing your monthly payments by half or shortening the term. It's then up to you and your DH how that's paid, your mortgage lender won't care so long as it gets paid.

Original poster

Malariahilaria · 29/12/2022 12:53

Not a second marriage no. To explain we both earn similar and both higher rate tax payers. We pay exactly the same into joint accounts for bills, food, childcare, kids savings, holidays, birthday parties for kids, everything joint essentially. Then whats left is our own for our own pensions, savings, treats, whatever we choose. He's had bigger bonuses than I and doesn't spend much so has a much bigger saving pot and wants to use that to pay off what he owes.

OP posts:

PrincessCalley · 29/12/2022 12:54

People are weird about money. So what works for one couple might not work for the next. I'm married for almost 12 years and we have a very separate attitude to money. I'm the spender and hubby is saver. But for big things like mortgage we split evenly. I have been gifted money that I used against the mortgage but once the lump came off the payments were equally adjusted. I know of another couple where one had the money for a half a house so they paid half and the other partner pays the balance. This is unfair as the other partner is liable for all the interest so its not a fair split.

If you do as you plan and split it and you are left paying you will have to pay the remaining interest as well as the balance. So maybe you could ask hubby to pay this going forward.

gogohmm · 29/12/2022 12:54

If he pays off his half, your interest will decrease not increase.

RandomPerson42 · 29/12/2022 12:54

If it’s a joint mortgage then surely there will only be one mortgage payment to the lender - so maybe the mortgage payment is coming out of a joint account that you both pay into?

If you remortgage then yes this will be for the entire mortgage amount not just his half or just your half, and the interest rate will be higher and so yes you may pay more in interest than you currently do each month; however, paying a big lump off the mortgage will reduce both the repayment part and the interest part.

For example, you might currently owe the bank £100k and currently have monthly mortgage payments of £800, and each contribute £400, with £300 being repayment and £100 being interest.

If H pays a lump sum off the mortgage, say £40k, leaving a mortgage of £60k, which at a higher interest rate might mean monthly mortgage payments of £560 a month, so £280 each, and that £280 might be made up of £155 repayment and £125 interest. So in that scenario you’d be paying more interest each month but less over the term of the mortgage due to the lump sum.

You need to run the exact figures and decide yourselves, what you want to do. Remember that paying a lump sum off will save you quite a lot of interest but will likely increase the monthly interest rate on what you have left to pay off.

Paying a lump sum off just before you remortgage is likely the best financial move rather than remortgaging earlier.

Everydaywheniwakeup · 29/12/2022 12:56

When you divorce, it is highly unlikely to be seen as 'his' and 'yours' - the house is a joint asset, the mortgage is a joint debt.

nobodygirl2023 · 29/12/2022 12:56

You're married & its a joint mortgage so even if he pays 'his half' off early (mad way to work finances in a partnership that also includes children but each to their own) - he's still liable to keep paying the mortgage until its completely paid off / you sell the property. The mortgage lender won't see it as his half / your half - officially he will still have an outstanding balance to pay and be liable for interest on that balance.

Is he suggesting that he pays his share off early and the leave you to cover the full monthly payment until mortgage is paid off??Personally I'd be horrified if my husband thought like this.

Afterfire · 29/12/2022 12:56

If he uses savings towards the mortgage it won’t just reduce his half, the whole amount will go down. And you are both equally entitled to half regardless of where the pay off came from. Seems a very odd attitude to have when you’re married!

isthewashingdryyet · 29/12/2022 13:00

nobodygirl2023 · 29/12/2022 12:56

You're married & its a joint mortgage so even if he pays 'his half' off early (mad way to work finances in a partnership that also includes children but each to their own) - he's still liable to keep paying the mortgage until its completely paid off / you sell the property. The mortgage lender won't see it as his half / your half - officially he will still have an outstanding balance to pay and be liable for interest on that balance.

Is he suggesting that he pays his share off early and the leave you to cover the full monthly payment until mortgage is paid off??Personally I'd be horrified if my husband thought like this.

I’d be horrified too.

With the information you have just given, the payments you each make into the joint account don’t change, but more will be left over at the end of the month, so you can jointly save more.

No point him keeping money in his own name as it still half yours. You are married.

Original poster

Malariahilaria · 29/12/2022 13:01

RandomPerson42 · 29/12/2022 12:54

If it’s a joint mortgage then surely there will only be one mortgage payment to the lender - so maybe the mortgage payment is coming out of a joint account that you both pay into?

If you remortgage then yes this will be for the entire mortgage amount not just his half or just your half, and the interest rate will be higher and so yes you may pay more in interest than you currently do each month; however, paying a big lump off the mortgage will reduce both the repayment part and the interest part.

For example, you might currently owe the bank £100k and currently have monthly mortgage payments of £800, and each contribute £400, with £300 being repayment and £100 being interest.

If H pays a lump sum off the mortgage, say £40k, leaving a mortgage of £60k, which at a higher interest rate might mean monthly mortgage payments of £560 a month, so £280 each, and that £280 might be made up of £155 repayment and £125 interest. So in that scenario you’d be paying more interest each month but less over the term of the mortgage due to the lump sum.

You need to run the exact figures and decide yourselves, what you want to do. Remember that paying a lump sum off will save you quite a lot of interest but will likely increase the monthly interest rate on what you have left to pay off.

Paying a lump sum off just before you remortgage is likely the best financial move rather than remortgaging earlier.

Thank you, this is sort of what I was thinking so it would seem paying an FA might be sensible just to make it fair.

I seem to have worried a few posters about the way we manage our money but it's always been this way and I like to keep my 'spare' money separate otherwise he'd be nagging me to shop around for 5 days for a better insurance deal for my car when I cba or gasp in horror when I buy shoes. He's a natural saver and I like spending and having fun. He tells me I'll suffer when I'm old but I have no intention of being old so all good

OP posts:

Claudia84 · 29/12/2022 13:01

The mortgage company don't take stock of whether the payment comes from you or him. They don't specify that you owe half and he owes half. Both of you are liable for the amount.
So if he wants to pay half of what you both would expect to pay then that's fine. But the mortgage company don't care. Both of you will be liable for the rest (including interest).
Just be careful that you're not subject to an early repayment charge.

Original poster

Malariahilaria · 29/12/2022 13:05

Yes fully aware the mortgage company won't care. If we split up or one of us dies then we'll work within the legal frameworks, just didn't want to get stung and end up paying more than I would if we both keep paying the same.

OP posts:

RandomPerson42 · 29/12/2022 13:05

PrincessCalley · 29/12/2022 12:54

People are weird about money. So what works for one couple might not work for the next. I'm married for almost 12 years and we have a very separate attitude to money. I'm the spender and hubby is saver. But for big things like mortgage we split evenly. I have been gifted money that I used against the mortgage but once the lump came off the payments were equally adjusted. I know of another couple where one had the money for a half a house so they paid half and the other partner pays the balance. This is unfair as the other partner is liable for all the interest so its not a fair split.

If you do as you plan and split it and you are left paying you will have to pay the remaining interest as well as the balance. So maybe you could ask hubby to pay this going forward.

This couple where one paid for half the half outright… I do not see what is unfair about this. E.g. If a couple just met and were buying their first house and one had £100k in the bank and they wanted to buy a £200k house together.

The person with the £100k in the bank could have kept that £100k in their bank and earned interest every year off it - that mathematically balances the other person paying mortgage interest (imho). But if they were a serious couple or married then it’s moot as both are liable for the whole mortgage and both own the £100k that is in the bank. Realistically one would expect them to pool resources and to use the £100k towards the house purchase and both contribute to the £100k mortgage as and when they can - some years one or other of them might not be working…

LunaAndHerMoonDragons · 29/12/2022 13:05

Unless you have separate mortgages in your own names only there's no such thing legally as his half, you're both jointly and severally liable. If he pays off 'his half' and you go on paying what's left he will have paid less for his half of the house as he won't incur the ongoing interest you will, but he is forgoing the interest that the savings could possibly earn so that would have to be considered too. I don't think it will effect your payments but you could use an online mortgage calculator to calculate the repayments in both scenarios.

GOODCAT · 29/12/2022 13:09

If you pay off his half, will you then be trying to get a mortgage in your sole name but leave the house in joint names? That will at best very drastically narrow your options for re-mortgaging. Otherwise it shouldn't adversely impact you and may well help you ultimately qualify for a lower interest rate if your ltv decreases.

However, from your husband's point of view he may be better off increasing his pension contributions or if you are not remortgaging soon, he may find he can get a better rate on his savings than by overpaying his share of the mortgage. Also from your husband's point of view he remains jointly and severally liable for your half and without a pre or post nup won't help if you divorce.

LunaAndHerMoonDragons · 29/12/2022 13:13

RandomPerson42 · 29/12/2022 13:05

This couple where one paid for half the half outright… I do not see what is unfair about this. E.g. If a couple just met and were buying their first house and one had £100k in the bank and they wanted to buy a £200k house together.

The person with the £100k in the bank could have kept that £100k in their bank and earned interest every year off it - that mathematically balances the other person paying mortgage interest (imho). But if they were a serious couple or married then it’s moot as both are liable for the whole mortgage and both own the £100k that is in the bank. Realistically one would expect them to pool resources and to use the £100k towards the house purchase and both contribute to the £100k mortgage as and when they can - some years one or other of them might not be working…

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What you can earn from savings in the bank is less than the money effectively earns having paid off that portion of the mortgage. It would come out in favour of the one that paid off early still, but not by as much. Of course that money could potentially have been earning more than the mortgage interest rate but that would require a requisite increase in risk.