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

Taking the key figures from your example:-

1. House sells for £440k
2. Mortgage balance £383k

Under the current arrangement, he first gets £100k and she gets £5k. There isn’t sufficient equity to make that happen, so she would then have to pay him £19k. In effect, they have both lost £24k (he gets £57k equity plus £19k from her).

Under the alternative approach where deposits are proportioned by the profit/loss, he first gets £85k and she gets £3.5k. Again, there isn’t enough equity, but this time she pays him £12.25k. In this scenario, he loses £30.75k and she loses £15.75k.

£24 < £30.75, therefore better for him.

You agreed what you agreed but FWIW this is what I think is fair...

House purchase for 445k
You paid 5k - 1.1% of price
He paid 100k - 22.4% of price
Together you borrowed 340k - 76.5% of price (38.25% each)

So when you sell, you split proceeds according to these percentages...

You get 39.35% (your deposit plus half the equity bought with mortgage)
He gets 60.35% (his deposite plus half the equity bought with mortgage)

"In reality if he had 95k in an isa paying 4%, he’d have around 20k more by now."

ISA interest rates were much lower in 2020, I think until 2023. And how much would he/they have spent on rent if they hadn't bought a property?

A different equity split calculation shouldn't just take account of the deposit - yes, he may have put in 95% of the initial deposit, but while he has still put in a larger proportion of money, after 6 years of equal monthly payments, that isn't going to be all of the equity.