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

So if you sold today at 570k and repaid mortgage of 270k there would be 300k - a few thousand in legal fees estate agents etc he gets his 95k and you get 5k remainder 170 so split 85k each so in total you get 90k and he would get 180k , neither of you could have bought this house as although he had a good deposit he didn't have a big enough salary. His saving meant you had 20% deposit rather than 5%. The equity in house has increased far more than his 95k would have done in the bank, over 6 years you have paid of 75k of the mortgage is 37.5k each. You have both done ok out of house as investment
He put in 95k and paid 37.5off the balance his investment is a total of 132.5k, he would get back 180 so a profit of 47.5k in 6years his 95k would not have gained 47.5k in the bank, more like 25k compounded. it would have needed to earning more than 7% to have matched growth from being in the house, so yes if he had put the 95k into a stock market tracker he may have done better.

But it was not a silly decision on his part he would come out with a similar profit as if he had put money in the market but then he would have been still renting but would now have about 145k deposit

House 445k
dep 105k
mort 340

he’s paid 100k dep mort 170k total 270k

op paid 5k dep mort 170k total 175k
total price 445k
270k = 61%
175k= 39%

This sounds fair to me. Each year your mortgage payments change the overall % investment you have made so it would need to be calculated at the point of sale based on total actual contributions (deposit and mortgage) and actual value.

i would also get this sorted (with some professional advice) before you add anything to the pot from inheritance and I would think twice about whether or not you should even do that, it does sound like he is preparing to leave.

When me and DP bought I put in a much bigger deposit than him as I had access to more cash than him. We are joint tenants and I haven’t even ring-fenced my deposit. But in our case we are completely financially interconnected. We bought a home not an investment. I put in more deposit but he earns more than me so puts in more to the monthly family pot. We are a team. I don’t think there is a right way to do it, it should be tailored to your circumstances, and it should factor in the type of financial relationship you have overall. I think the fact that he needed your salary to get the mortgage and presumably you couldn’t have bought somewhere of that value individually is significant also. IMHO the isa comparison isn’t relevant really, as if he had put it in an isa he would not have owned a home and would presumably have been pouring money away into rent.

I think you need to multiply up the deposit money by the % increase in value of the house, so if the value went up by 10% he gets £110k back off the top and you get £5.5K off the top and the remainder is split 50:50, he's right that if he just gets his £100k back he will have got no interest on his £100k over however many years and you have only got no interest on £5k.

The “he could have invested the £100k instead” argument doesn’t really hold up when you look at the full picture.

He wasn’t just parking money in an asset - he was living in the propery, sharing all the running costs, and benefiting from leverage on the whole house value, not just his deposit.

OP has been paying half the mortgage and expenses for six years, which is a significant financial contribution in its own right. The agreement they made reflects that balance - more upfront from him, equal ongoing commitment from both, and shared upside.

It may feel different in hindsight, but its not inherently unfair. Who knows that his life would have been like had OP not partnered with him..

It may feel different in hindsight, but its not inherently unfair. Who knows that his life would have been like had OP not partnered with him

It is inherently unfair. It's not necessarily wrong exactly, couples generally aren't going to perfect equity but the arrangement is massively financially beneficial to OP.

it’s not automatically ‘unfair’ though. Unbalanced, yes.

he agreed to it, understood it, wanted it…

Your accurate summary of the arrangement as more upfront from him, equal ongoing commitment from both, and [equally] shared upside is one I would describe as unfair.

I am treating unfair as a synonym for unbalanced or not equitable. Take your point though if you mean it more as outrageous or abusive or something.

And women wonder why men dont wanna settle down anymore lol literally just to get ripped off from the start

He really should have ring fenced his deposit. But that’s down to him.

@Boomer55he did ring fence his deposit, he just now thinks that wasn’t enough and isn’t fair.

So he will get his initial stake back before any other products are split. And then the profits will be split in the proportion that you both paid into on an ongoing basis. So that seems absolutely fair.

He has the security of knowing he will get 100k back. If he’d ringfenced say 20%, then that could go up or down.
im on your side.

I can see his point that he could have put less in and put the money in a stocks and shares ISA and then be keeping any profits for himself but he should have thought of that earlier

No. The agreement should stand.

When I did this the deed of trust stated I got my £90k back first then half the profit or loss. That's fair

i think people are misreading this - you both get your deposit back, and you BOTH paid 50-50 throughout, Therefore you get 50% of any profit. simple.

thats why the solicitor agrees - why on earth would you give him more money!? because he would be profiting from you!?

im guessingn the relationship is over?

You should both get back the percentage of money that you put in in my opinion IF you split especially if it’s accrued interest. Anything else should be split 50:50.

This is a bit of a weird take - where is the security coming from? Are you suggesting that in the event of negative equity OP would owe him the missing money? Where would she get it from?

It's one of the ways it's unfair, he's risking 100k, she's risking 5k.

I really wouldn't if I were you. I would ring fence it for my children. I am not at all sure of his motivation.

To make this fair, simply proportion your individual deposits returned by the % profit (or loss), and split the remainder equally.

For example, if the property sells for +20%, he first takes out £120k, you take £6k. The remainder is then shared.

He’s messed up by not insisting on his 95k as a percentage of the house. If the house is worth 2 million in years to come his 95k would have grown to close to half a million.

He has a point but time to raise it was 6yrs ago

To be fair if he had just matched your 5k deposit and put rest in even just a cash savings account, it would be growing by 3-4k per year and if S&S isa much much more.

House prices are static a or falling in London so a big deposit is not always the best idea ( assuming you have one)