How to split income/outgoings?

[CarrotyO]

I will be moving in with my bf of two years, into a new house, once the sale/purchase goes through. We're not married, no kids - although will be trying for a baby. We're 37/41 years old.

The mortgage is in my name alone, and I have built up the equity for it. I am currently in a position to save every month. I overpay on my mortgage when I can. I will be taking on a bigger mortgage, but it means we can move to a nicer area and we will both have the space to work from home a few days a week. I'm not sure how to split the money / bills equitably, and also save for things like home improvements and holidays.

Income: I bring in £3k after tax, he brings in £1.6k after tax. No bonuses or extra income.

Outgoings I estimate may be around £2k a month:
Mortgage: £1k (but it would be nice to overpay)
Bills: £600 (Including car expenses)
Food: £300
Cats: £100

We also both have commuting costs, he is paying for a therapist privately.

Currently I am picking up more of the 'couple' costs but he does pay for stuff eg I will book a weekend away and pay for the air bnb, but then he will pay for dinner when we eat out.

I always think shared costs should be split relative to your take home pay. But I’d be very cautious given the house is in your name - if he’s contributing to the mortgage surely he’d want to own a % of the house? If you split he could claim this if he’s been paying towards the mortgage-which is fair enough. I think you should have an agreement that he has no claims On the property, and he pays the bills. You pay the mortgage.

I would seek legal advice before the two of you move in together. You certainly need a cohabitation agreement drawn up.

Rather than merely overpaying on the mortgage you may want to ask your lender about making capital repayments.

Is marriage or civil partnership something you both want going forward?. I would seriously reconsider ttc whilst you remain unmarried.

Split everything in half. He needs to step up if needed.

Get some legal advice and sign a cohabitation agreement. Not been together long. Presumably you don't want him to have a share of your house. How is it going to work when you have a baby? Is he going to look after them?

Can he start to earn more money? Presumably not if he's 41. Is he full time?

If he isn't paying it your mortgage is he paying rent? That seems fair but he needs to think of his own future security if you aren't going to get married.

As for costs split equally except mortgage where he should pay less if that's equivalent to market rent.

Whole thing seems messy and a bit hurried but I understand that at 37 you Want to have a baby.

If I was him I'd be very wary, he's going to be in a vulnerable position.

Whatever you can overpay should be split between your mortgage and a savings account in his name, as you own the whole house.

I'd be advising him not to do this if I was his friend!

If you want the house solely in your name, you pay the mortgage entirely and any overpayments. You also solely bear the costs of any home improvements, furniture and so on.
You split the household bills. He'd have them anyway if he were renting.
You split childcare costs down the middle when you go back to work. You consider very carefully whether it is sensible for him to physically do the childcare and become a SAHD and what this will mean for family finances if you eventually get married.
You split food costs, holidays and so on.
You don't charge him rent, he'll have enough to pay for with that lot and should save any extra to protect his future.

If you wish to get married in the long term, speak to a solicitor about a cohabitation agreement and any options to protect the assets you bring to the marriage. After that, consider a straight pot of income into a joint account with similar personal spends. That assumes he's the type to pull his weight with a small child.

Two year isn't very long at all so it's well worth you both really thinking about how you both want to do it especially if you are considering having a child.

There are lots of things to consider. Maternity leave, who would be home with the kid, if you might want to reduce hours, ownership of the house, overpayment of the mortgage. How much to put into pensions, how much to save. Etc etc.its so much better to discuss everything you can before moving in together especially as his salary is low'ish.

I'd have a 'meeting' with him and I'd write down everything you need to discuss and agree on. Then I'd think about a co-habitation agreement. In some ways this might be more important to him as you are not married.

Are you sure you won't feel resentful of him?

I want to keep the house solely in my name. I will be brining £80k equity to it from the sale of my first house. Especially if I have kids, I would want to keep the house for me and the (currently non-existent) children if anything were to go wrong.

If the plan is that I pay for the whole mortgage and home improvements, furniture etc, and we split the rest of the costs (bills, food, holidays etc), then he is getting a very good deal and will be left with more disposable income than me, whilst getting to live in the nice house?

FWIW he is divorced and didn't take a penny from his previous wife who earned similar to what I earn. Although they rented, they didn't own any property. He isn't the type to make financial demands. I just want to be fair.

I would have thought it isn't in my interests to marry him whilst he earns less than me? Marriage is not in the forefront of my mind at all.

I bring in £3k after tax, he brings in £1.6k after tax
So roughly a third / two thirds

Outgoings I estimate may be around £2k a month:
Mortgage: £1k (but it would be nice to overpay) you need to check whether you can take his contribution as a tenant without it affecting your ownership of you break up. I wouldn't expect this to be a full third but maybe 250/750
Bills: £600 (Including car expenses). Really should be 200/400
Food: £300 should be 100/200
Cats: £100 should be 34/64

So he's paying
250+200+100+34=584 so 1k free cash minus commute and therapy
You're paying
750+400+200+64=1414 so 1.5k free cash minus commuting

Thanks @SleepingStandingUp that sounds sensible. I could put the extra £500 towards my mortgage so we have £1k each. And we could similarly contribute to a savings pot for holidays and couple activities.

The actual logistics of it seems tricky. Maybe I need to have all the bills in my name and he sends me money each month.

If the plan is that I pay for the whole mortgage and home improvements, furniture etc, and we split the rest of the costs (bills, food, holidays etc), then he is getting a very good deal and will be left with more disposable income than me, whilst getting to live in the nice

I think you really need to think about everything.

Things like, childcare and maternity leave too?

What about house insurance, boiler services, garden maintenance. Who will do the decorating? Who will choose the furniture and paint? Is it your house and he is just staying with you? Is there only one car parking spot? Will that be yours or shared?

I think it's quite tricky to navigate things when couples have different incomes and wealth.

It would be in his interests to marry you.

He's not getting a good deal at all, because he gets no security and you can boot him out at any time.

I think this arrangement is exploitative, I would advise any woman moving in on those terms to rethink!

If you want to be fair, I think he should live rent-free or very low rent, he pays half the bills, and he gets to save for his own future security.

Sounds like he gave his ex a good deal. Make sure it wasn't at your expense.

If you want to be fair, I think he should live rent-free or very low rent, he pays half the bills, and he gets to save for his own future security.

That would be exploitative of me surely? Rather than paying £600-£1000 to rent his own flat, he gets to live with me rent-free, resulting in him having more disposable income than me. How is that at all fair?

No, because you get all the equity and all the security - which you value very highly because you have made it clear you won't allow him any equity or any security.
If you didn't have him as your no-rights lodger, you wouldn't have the contribution to day-to-day living costs.

Have you told him how you intend to treat him? I think this relationship sounds a very bad deal for him.

It's fair because you are going to continue to build up the equity in the home you own, which will also continue to go up in value. He will have no financial security.

However, for what it's worth, I did have a similar set up to what you're proposing with my partner who've I've been with for 10 years.

He bought a flat, I moved in. I paid him £400 towards the mortgage and bills (this was years ago). I still had my own separate bills like car, phone etc. He owned the flat so he paid for any home improvements. We would buy furniture together. We both agreed if we split up I would just walk away. I had a separate asset which I still own, so I had no worries about financial security and was happy to contribute to the mortgage, it was cheaper than rent.

As it happened we're still together 10 years later. When he sold his flat, he made 70k. By this point we had a child (still unmarried) so we decided to buy a house in joint names. We bought the house as 'tenants in common' so his 70k is ring fenced and protected. If we were to split up, we would both have 50% of the equity, and he would get his 70k back.

You should get legal advice before you buy.

I think you really need to think about everything.
Thanks for these prompts, they are useful.

Things like, childcare and maternity leave too?
Childcare would be added to the list of shared bills. I would get 6-months full paid maternity leave from my employer and 3-months SMP. We would need to make it stretch. Tbh I'm not sure if I will be successful in getting pregnant or if it's too late for me, so that seems quite far off right now.

What about house insurance, boiler services, garden maintenance.

I include house insurance in the bills, not sure about boiler and garden. Probably will fall to me again realistically.

Who will do the decorating? Who will choose the furniture and paint? Is it your house and he is just staying with you? Is there only one car parking spot? Will that be yours or shared?

He helped me decorate and make small improvements to my current house before I put it on the market. We both painted, but he did more. I expect that would continue. I've been trying to include him in conversations about furniture and decoration of the new house as I want him to feel comfortable there and like it's his. It's our home together. But if something went wrong, if it turned into a LTB situation, then I would expect him to leave. Of course I want him to have savings so that he could pay a deposit and get a flat rental again, like he currently has. Same as with my car. It's my car, I bought it, I pay the insurance. He drives it and uses it if he needs it. We share it. But if we split up, obviously it returns to being just my car again.

Obviously it is his responsibility to stand up for himself and not be used like this, but to me it seems really fucked up. I don't think it would be wise for him to have a child in this unbalanced set up.

This I want him to feel comfortable there and like it's his. It's our home together. is simply not true. He is a paying guest and can be kicked out at any time.

I get that you want to keep the house in your name as you’ve put in the massive deposit. But what happens when you have children. Let’s say you have 2/3 children and take years off work. How will you pay the mortgage on your own then? if he starts paying for everything (and you only go back to work part time) how fair is this on him? My ex had a flat when we met, we brought a house together got married had 3 children and I spent years not working and then only working part time. When we divorced I got the majority of the house because of the children. You have to be realistic if you marry and have children he will be paying that mortgage x Best thing to do is get an agreement drawn up that the lump sum you put in will always come back to you first if you split but think about putting his name on the mortgage, if you love him and see this as long term treat him a such

I agree. DW and I have always split proportionate to income. We put the housekeeping and bills money into a joint account by direct debit so neither of us particularly pays for anything specific. To be fair, even if the mortgage isn't in his name, he'd otherwise pay rent so I'd still split it proportionally.

I get that you want to keep the house in your name as you’ve put in the massive deposit. But what happens when you have children. Let’s say you have 2/3 children and take years off work. How will you pay the mortgage on your own then? if he starts paying for everything (and you only go back to work part time) how fair is this on him?

That is realistically never going to happen. He isn't in a position to support me and pay the mortgage if we have kids. I would need to take my paid maternity leave and then go back to work.

If this was reversed everyone would be telling you to run a mile and NOT to have kids with this person.

You can't reverse the positions like that though because I am female. If we have kids I will be the primary carer. I need to think about what is best for my children, which is that I keep the house if it comes to it. It would only come to something like that if he changed and became a shit partner / father.

I am also just asking for advice. I'm open to hearing what is a fair way to do this. I think that me keeping my house is a fair boundary. He is currently paying £600 a month to rent a 1-bed flat plus bills, so will save money by moving in with me as he wouldn't pay anyway near that with me based on the calculations discussed above.