Partner disputes mortgage profit split

[olivia12]

Hello, I would like some advice regarding my tenants in common joint house purchase. My partner and I bought a property 6 years ago. He paid 100K deposit, I paid 5K deposit.

All mortgage payments/bills/maintenance are split 50/50.
We agreed to sign a deed of trust that in the event of us selling the house before our mortgage is paid off, we would each get our deposit back, pay the remaining mortgage, and any profits would be split 50/50.

He was happy with this at the time, but for the past two years he occasionally brings it up, saying it’s unfair and he should get more profit in case we split.

I know legally he has agreed and signed the trust, but the fact he keeps bringing it up at every argument, and feels very resentful, it’s starting to affect our relationship. If he had wanted a proportional split, I think our mortgage payments should have reflected this, but I’ve always paid 50/50.

I have been to a solicitor that also agrees with me, but I am not sure that my partner will ever see it that way, even though at first he did!

Any advice? Should this be in the relationship forum?

Thank you

Thank you for all you replies.

We do have children from previous relationships, hence the tenants in common joint purchase.

At the time, he did get advice and he did agree to do it that way. Also his dad and brother agreed that it was fair to ring fence his deposit.

But I see others points about being unfair. I would never have been able to purchase a house of this value without his large deposit, but equally, he would never have been able to buy it without my payslip and 50% mortgage payments contributions.

It is true @ArtAngel that it would be fairer to split the value in two parts, something I had not thought about at all. Thank you for this idea and definitely something to discuss with him.

But I do agree with posters that said regardless of fairness or unfairness, it feels he does have a foot out of the door if it’s even thinking in these terms.

@Winter2020 exactly! Does he want his pot of gold or being with me? I don’t know. I think he regrets buying the house and wishes he had some money in his pocket instead.

He doesn’t want to get married, even though sometimes he talks about it.
I was married before, so I don’t mind. No more children on the horizon because of our age.

I have asked him what he wants, and he says he wants it split fully proportionally, but I think what @ArtAngel proposed it’s more fair.

I agree though that this is not a good sign for our future, and I am not sure I can live with all this resentment. It does make me feel quite unloved as well, and I feel I’m on my own.

thank you for all your responses!

Also to add that I had agreed, and I have full intention to, that when I will come into some money through inheritance, I will add it to the house, as to even out our deposits and pay less monthly.

What was the overall value of the house?

To the poster that asked what else is going though in the background, it is true that things in the relationship have not been going well.

I took a loan to do a Master to become a psychotherapist and I’ll graduate in July. He found this selfish as I am just thinking of my career. But I have done it to improve my career prospects and earnings, which will eventually benefit both.

This loan hasn’t affected him at all, as I still have been able to pay everything of my share, but he argues we could have got a loan to make improvements in the house instead.

But at the core of everything, I don’t even think it’s about money, I think he is unhappy, depressed and thinks money would make all the difference. He drinks at weekends, which is when he starts arguing about it.

@BramStokey
We purchased the house at 445K 6 years ago. We live in London. Not sure how much it is valued at now. Mortgage left now is 270K

id venture there are bigger issues at play than the money

I think this is quite common. We had this, only it was 80/20. I was the 80. It only dawned on me how unfair it was when we split. Up until then I didn’t care. But what was unfair in our circumstances was that I’d taken a hit on my career/salary from going part time after kids. So ex partner got career progression, salary growth and half share of house profit. Sounds like your partner is planning a separation. You have a legally binding contract. I would do as others have suggested and instigate a split, if that’s how he is now, then it’s only going to get worse. It doesn’t sound like he considers you a team. In reality if he had 95k in an isa paying 4%, he’d have around 20k more by now.

I don’t agree. They get the same profit because they have both paid 50/50 on the mortgage. He gets his £100k back OP gets her £5k back and then the remaining balance split 50/50, I fail to see how that’s not fair?

If you do that you should also change the contract you have so you get that amount back. So he gets his £100k you get your £5k plus the inheritance then the remaining profit split 50/50

@olivia12 Sadly I think this means he wants to leave you. Why else think about this? I think you should let him go since he's only getting you down.

It’s not fair because the person who puts in £100k deposit only gets that £100k back in say, 10 years. If the house is now worth 50% more that £100k deposit is worth £150k but the extra £50k is now shared…

I put in over £200k because I had a previous property that had gained value. My DP put in £20k and between us we paid off a £150k mortgage.

Afrer nearly 20 years I got my cash £200 back, Dp got £20 k back… and the rest was split. So Dp waltzed off with 50% of the profit on my £200k.

I am sorry to hear that you took a hit through looking after your children. That’s quite unfair.

I agree it sounds like he wants out…and you are right his money would have gained a lot in an isa.

Had he invested his 95k would be worth around 25k. Yours around £1.5k

That's his loss, which will be compounded by house price increases. I would encourage fairness because its generally better for everyone..I'm assuming he didn't plan to make him worse off?

Yeah he’s being had over

Can’t you just divide it fairly on a mathematical basis?

you get: profit x (your contributions / total contributions)

he gets: profit x (his contributions / total contributions)

where:
your contributions = £5k + 50% mortgage payments
his contributions = £95k + 50%
total = yours + his contributions combined
and profit can of course be negative…

that way each is rewarded fairly for their contributions to the profit

This of course ignores the fact you will likely have benefitted from a lower mortgage interest rate as a result of his higher deposit (and also ignores the fact that without his much higher deposit, you’d not have been able to purchase in the first case given you only had a £5k deposit). But personally, I’d let that lie

But in terms of profit they also paid 50% towards that

@olivia12 in addition to my previous post I should have added: why is it even a problem?

Surely in a long term relationship there’s no “yours” and “mine”. Surely it’s just “ours”?

I think he needs to talk to a solicitor to discuss this further and determine what he is actually asking for in terms of split profits. I can see his point of view and don’t think he’s unreasonable.

However, why is he bringing it up is he unhappy in the relationship? (edited to say apologies I just saw an update I had missed earlier)

This is definitely the fairest way of doing it.

50 % towards the MORTGAGED % of the purchase price, yes.

But profit is earned on the deposit, and the mortgaged part if property prices rise.

So My Dp benefitted from half the profit on my massive deposit, half the profit from the mortgaged bit that we bought together. (and half the profit on his timy deposit)

I benefitted from half the profit on his tiny deposit plus half the profit on the mortgaged but we bought together (and half the profit on my massive deposit)

So he benefitted from the difference between the profit on my massive deposit and his tiny deposit.

The OP's Dp is realising the same.

If they divide the house out onto %'s - respective deposits (including any further capital the OP puts in from inheritance) , and the mortgaged bit , they can make it fair.

I would discuss with him that he clearly resents the legal agreement but you would agree to change it to what ArtAngel has suggested provided he pays for any costs to do that.

He had the option of buying on his own. Maybe he would have struggled to pay 100% bills and mortgage.
Then shouldn’t you both get any profits if you’ve done this together? I can see that you would want your deposits back. I think otherwise it’s not unfair.
After 6 years he doesn’t sound close to marriage though.

OP I don’t think 20k is that large a return. You need to find out what the house is valued at. You can Google that, then do the division. I bet his figures look quite healthy. Also the fact you are planning to balance things out with inheritance speaks volumes about you (and you must get the agreement amended to reflect what you add). But it does seem like the relationship is doomed, sorry.

The profit on the house grows with mortgage payments and capital growth. Deposits aren’t counted as profit. Yes the larger the deposit the lower the payments and less interest which would generate more profit but if you take out the deposits, remaining mortgage and fees when the house sells then that is the profit, so if someone has been paying 50% of the mortgage payments that create equity why shouldn’t they be entitled to 50% of the profit?

That’s what I had been thinking all along, but it seems it’s not so clear cut. I think the difference is that this is a relationship and not a business partnership, so there should be room for helping each other. Otherwise why bother buying a house together at all.

I looked up the valuation of the house, allegedly 570k minus the 270k mortgage remaining, how would you split the remaining 300k @ArtAngel ?

I am just very confused and I want it as fair as possible. If after things are deemed fair, he still isn’t happy, that’s my cue to go as he obviously doesn’t value the relationship enough. We have been together 10 years and everything is split in half, and sometimes it feels very transactional and precarious.