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  • FIRST POST
    • davidmcneil99
    • By davidmcneil99 11th Mar 17, 5:49 PM
    • 2Posts
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    davidmcneil99
    How to split profits when equal deposit, unequal mortgage repayments
    • #1
    • 11th Mar 17, 5:49 PM
    How to split profits when equal deposit, unequal mortgage repayments 11th Mar 17 at 5:49 PM
    I am going through the process of buying a property with a friend where we will be putting in the same deposit but I will be in a position to make over payments but they wont be. It will be a buy to let/interest only mortgage.

    When it comes time to sell the property, how would we split any potential profits?

    If to begin with we have made equal deposits then any profits would be split 50/50. If I repaided the outstanding mortgage (for ease, lets say original deposit was £10 each and I then pay off remaining mortgage of £80), would we then spilt any profits with myelf getting 90% ((80+10)/100)and my friend 10% (10/100)?

    Am I right or have I missed something?
Page 1
    • silvercar
    • By silvercar 11th Mar 17, 5:57 PM
    • 35,866 Posts
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    silvercar
    • #2
    • 11th Mar 17, 5:57 PM
    • #2
    • 11th Mar 17, 5:57 PM
    Bit unfair if you have both jointly paid the mortgage for say 10 years and then you pay off the mortgage one year before selling.
    • davidmcneil99
    • By davidmcneil99 11th Mar 17, 6:02 PM
    • 2 Posts
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    davidmcneil99
    • #3
    • 11th Mar 17, 6:02 PM
    • #3
    • 11th Mar 17, 6:02 PM
    Its intrest only, buy to let so the intreset payments will be coming from the rental, with any profits from that split 50/50. The only money paid from my friend will be the initial deposit amount.

    They have already said that they do not want to make overpayments but are happy for me to do so.
    Last edited by davidmcneil99; 11-03-2017 at 6:03 PM. Reason: adding clarification
    • AdrianC
    • By AdrianC 11th Mar 17, 6:07 PM
    • 15,044 Posts
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    AdrianC
    • #4
    • 11th Mar 17, 6:07 PM
    • #4
    • 11th Mar 17, 6:07 PM
    You're a pair of grown adults. I'm sure you can come to an agreement you both find acceptable.

    If you can't, then I'm REALLY not sure you should be starting down this route.
    • anselld
    • By anselld 11th Mar 17, 6:09 PM
    • 5,277 Posts
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    anselld
    • #5
    • 11th Mar 17, 6:09 PM
    • #5
    • 11th Mar 17, 6:09 PM
    Keep everything 50:50, don't make overpayments.
    It will be mind-numbingly complicated otherwise and probably lead to disagreements.
    • getmore4less
    • By getmore4less 11th Mar 17, 6:14 PM
    • 29,750 Posts
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    getmore4less
    • #6
    • 11th Mar 17, 6:14 PM
    • #6
    • 11th Mar 17, 6:14 PM
    decide what your ownership is at the start and try to never change it

    Treat the debt as a separate transaction.

    either start with you owe different amounts to account for your ability to overpay or stick with say 50:50 and you can pay off your 1/2 of the debt.


    so say you go 50:50 with £10+£10+£80(your example)

    you pay the mortgage 50:50 and if you overpay you change the payments to the new % easy if you are I/O.

    say you pay off 10, then you owe 30 Other still owe 40

    max you can overpay is 40. when the mortgage is paid by other.

    when you sell you get 50:50 of the total and then pay off whatever debt you have left.

    keeps it very very easy.

    as you own the place 50:50 you pay for everything like repairs 50:50 and split the profit 50:50 from rent & sale.


    if you know you can overpay more then you could say split the mortgage differently

    say own 75:25 then you have 10+10 and the 80 is split 15+65 making 25% and 75% ownership, you can now pay up to 65 capital off the debt but pay more of the interest before you you do.

    you then pay/split 25:75 any costs/profit and pay off whatever debt you have.
    • MyOnlyPost
    • By MyOnlyPost 11th Mar 17, 6:42 PM
    • 1,514 Posts
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    MyOnlyPost
    • #7
    • 11th Mar 17, 6:42 PM
    • #7
    • 11th Mar 17, 6:42 PM
    I bought property with a friend, we kepy everything 50:50 even though I could have put more in. Insted I opted to buy a house (or 2) for myself as well as the shared houses we bought together
    It may sometimes seem like I can't spell, I can, I just can't type
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